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Ethereum Soars To $570: Is Capital Shifting From BTC To Altcoins?

Ethereum’s price exceeds $570 for the first time since 2018. Have investors started switching from BTC to altcoins? What could prevent Ethereum from continuing to rally?

Ethereum updated 2020 high

Ethereum saw explosive gains yesterday, with the main altcoin rising about 10% from its daily low of $515 to hit $570 at the time of writing. Ethereum can be congratulated on reaching a new 2020 high. But this may be only the beginning of the rally, and Ethereum will show new growth points more than once before the end of the year.

The optimism about Ethereum price dynamics is reinforced by several positive factors. The first is the market behavior of Bitcoin. After peaking at $18,488 in the last trading week, the flagship crypto price has dropped to $17,500. One of the reasons for the price pullback was the decline in institutional investor activity over the weekend. Bitcoin may be now approaching a correction phase, so market participants are switching from BTC to altcoins.

Secondly, we see a general recovery in the DeFi market, which is accompanied by a new influx of funds. Leading DeFi tokens also cheered up after falling in November and closed last week again.

Ethereum faces a strong resistance level

Ethereum surpassed the $500 level for the first time since June 2018. Despite the optimistic forecasts of traders, Ethereum will struggle for the critical resistance level of $600 in the short term. In the specified price region, the asset will face strong selling pressure, since this point became a “springboard” for bears two years ago.

One of the analysts provided data from the Ethereum order book to confirm this forecast. On Twitter, he noted the following:

Large investors continue to purchase Ethereum, however, the demand for the purchase of serious volumes of the crypto asset remains insufficient. I don’t think Ethereum is ready to break the $600 milestone right now.

If the bulls push Ethereum above $600, another victory may appear on the account of the crypto asset – a price increase of 350% per year. Overcoming this resistance level can bring Ethereum into a new price range of $ 700 and above.

Ethereum 2.0 “heats” the price of ETH

The launch of the deposit contract was one of the catalysts for the current surge in the price of Ethereum. As we approach the deployment of the new phase of Ethereum 2.0, this trend can only intensify.

Vitalik Buterin, is convinced that at this stage the foundation is being laid for the successful integration of the Ethereum ecosystem into the global economy. He also added:

Now it is important for us to build a reliable ecosystem so that in 2 years our main task is narrowed and consisted only in supporting the functionality of the network. Our team is following the Ethereum 2.0 roadmap, and upon completion of the upgrade process, we are confident that we will reach the point where our network becomes an integral part of the global economy.

In general, analysts give positive forecasts regarding the dynamics of the price of Ethereum in the long term, and the launch of Ethereum 2.0 may play a decisive role in this.

According to technical analysis, we can slightly adjust from the current price to the level of 560-570 USD, but Ethereum is gaining momentum and does not plan to stop yet; the limit of 600 USD does not seem so impassable. Most of the market participants are set for growth now, and until we see protocol 2.0, the increase will continue with small corrective movements.