Recently, the world’s second-largest cryptocurrency by market capitalization broke another milestone in January.
After going through a small retraction on the 18th due to bearish pressure regarding reports of new crypto regulations and the imminent bankruptcy of the lending company Genesis, $ETH recovered that day’s losses, and then some.
Following an unsuccessful attempt at reaching $1,600 this week, the asset returned to that price zone today. This time, Ethereum rushed through that zone, going from $1,563 to $1,639 in a matter of hours.
This is the first time ETH trades abode that price zone since November 7, the first day that the FTX collapse went public, which ultimately resulted in billions in losses for the market.
The fact that the second largest crypto is reaching new highs on the charts even during the announcement of big news like Genesis bankruptcy, indicates that the recent favorable market momentum is more than likely more than just a “phase” for crypto.
After one of the worst years in the history of digital assets, currencies like Ethereum are not only on the way to recovering their recent losses but also gaining more confidence in order to attract new potential investors in the future.
Why The $1,600 Zone Is Important
The $1,600 zone represents a significant resistance level that the cryptocurrency has struggled to break through in the past.
In addition, in the asset’s best years, during the crypto rush of 2021, the $1,600 margin served as a “bottom”, meaning the lowest price point that the market is willing to go to during a specific timeframe.
That zone was tested several times in March 2021, after distancing itself from the bottom, Ethereum was able to pick up a year-long run, reaching $4,627 on its all-time high on November 14 of that year.
In summary, the $1,600 zone for Ethereum is important because it represents a key resistance level, a psychological level, and the all-time high price level. A break above this level could signal a bullish trend and potentially lead to significant price increases for the cryptocurrency.
