Synthetix (SNX) Gains 4% Despite Strong Drop in Ethereum Price
Ethereum (ETH) and a majority of other large-cap crypto assets have faced strong corrections over the past day. Per CoinGecko, BTC is down 2.5% in the past 24 hours alone, falling from the $24,000 region to $22,800 as of this article’s writing. Ethereum alone is down 5% in the past 24 hours, falling from the year-to-date highs to $610.
Despite the strong drop in the price of Ethereum, there are some altcoins that have largely been spared from the drop.
The Ethereum-based Synthetix Network Token (SNX) Is up 4% in the past 24 hours per CoinGecko. The DeFi-focused coin currently trades for $6.20, just a few cents shy of the recent highs near $6.40.
Synthetix may be benefiting from positive news regarding a scaling solution that it is looking to integrate with. SNX also recently received a recommendation from a prominent though controversial cryptocurrency research group.
Related Reading: Here’s Why Ethereum’s DeFi Market May Be Near A Bottom
Ethereum-Based SNX Holds Key Level
While SNX is up on the day, it wasn’t always the case. Around 12 hours ago, the cryptocurrency faced a strong dip under $6 as Bitcoin spiked under $22,000 and as other cryptocurrencies also lost key support levels.
Analysts noted that if the Ethereum-based crypto asset fell below the support level marked on the chart below, it would see a strong move lower:
“Lose this and we’re heading to the $5.3-5.5 buy area. Would depend on how #Bitcoin reacts to range low, but could make a solid invalidation.”
Lose this and we’re heading to the $5.3-5.5 buy area.
— Pierre (@pierre_crypt0) December 21, 2020
Analysts are fearful, though, that if Ethereum continues its descent, altcoins will inevitably follow. As seen in October and during previous corrections, altcoins largely based on Ethereum have trouble keeping up when ETH is dropping rapidly.
Related Reading: Tyler Winklevoss: A “Tsunami” of Capital Is Coming For Bitcoin
SNX’s rally comes amid positive news for the Synthetix ecosystem.
Optimistic Ethereum, a scaling solution built by the Optimism team, seems to be inching towards a launch. This is important as Synthetix has teamed up with Optimism to port its application, or at least some parts of it, to the Optimistic Ethereum testnet, then mainnet.
On the Optimistic Ethereum trial/testnet, Synthetix wrote earlier this month:
“The third phase of our Optimistic Ethereum trial with @optimismPBC is live! In this phase, we will be trialing withdrawals from L2 to the L1 Goerli testnet. L2 withdrawals are only available to SNX stakers who participated in the previous phase of the L2 testnet trial. If you are one of these stakers, you will need to withdraw at least 0.01 SNX by Monday December 7th to be eligible for rewards once mainnet L2 is launched.”
Synthetix should move higher as these scaling updates are rolled out.
Related Reading: 3 Bitcoin On-Chain Trends Show a Macro Bull Market Is Brewing
Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Charts from TradingView.com Synthetix (SNX) Gains 4% Despite Strong Drop in ETH Price