Ethereum bulls lost fight for $1,600 price range and now consolidate at $1,500
Ethereum’s recovery rally ended quite unexpectedly as the price of the second largest cryptocurrency in the market fell massively after the Asian markets opened.
As the chart shared by Alex Kruger suggests, we saw a relatively large selling volume on the market as Asian bears started actively selling their ETH holdings, pushing the liquidation volume on the Ethereum market to almost $100 million.
Within a day, Ether lost nearly 10% of its value, marking the cryptocurrency’s third failed attempt to breach the $1,600 threshold. While Ether has managed to gain a foothold above the 50-day moving average, the fate of the recovery rally is questionable as ETH cannot reach new highs.
Some traders believe what we see on the cryptocurrency market today is a bear trap that will become a catalyst for another reversal, which is going to push the price of the first cryptocurrency to new lows.
Deflation is not enough for Ethereum
With the next Merge update, Ethereum will finally become deflationary as net asset issuance hits -4.5%. Unfortunately, the fact that Ether’s supply will start to gradually decrease in the future is not enough to push the price of the asset towards a new ATH.
As the market performance of ETH suggests, investors are not willing to acquire more coins because of the decreasing supply. The main driver for Buterin’s creation is usage and adoption, which only comes with the blossoming of various use cases based on Ethereum.
At press time, Ethereum is struggling and consolidating at around $1,525, losing more than 5% of its value in the past 24 hours and 10% from yesterday’s high.
