The second-largest cryptocurrency by market capitalization just had its first retraction day since reaching back to the $1,500 margin.
Overall, the asset lost 0.56% of value throughout the day. While assumptions might seem like that is a negative day for Ethereum, that is not 100% true.
$ETH token refused to go below the $1,500 resistance. That fact indicates that the cryptocurrency has likely found a new bottom, at least for the time being.
On top of that, the 24-hour trading volume reached a 3-month-long record. Only topped by the immense selling pressure that happened on November 9, due to the FTX collapse.
After surpassing the $1,300 zone a couple of days ago with relative ease, the fact that Ethereum was able to maintain the $1,500 margin despite growing selling pressure is great news for investors of the asset.
Much like the previous margin, the $1,500 resistance/support is a historically important one. A lot of Ethereum’s greatest market movements (positive or negative), respected that margin.
On the seven-day chart, Ethereum is still up by an astounding 17.45%. So far, January has been the best-performing month for the asset, since the end of the crypto market rush that elevated the asset to $4,734 on November 11, 2021.
Ethereum is Once Again Deflationary
As the on-chain foundations get stronger since Ethereum’s merge to proof-of-stake, the ETH issue enters a deflationary state.
In January, 732.000 $ETH were burned, while 622.000 were issued. This means that once again the 2nd most popular cryptocurrency is reaching a true-deflationary state in its ecosystem.
Why Is Ethereum Consolidating At $1,500?
Consolidation in technical analysis is the period in which an asset moves inside a range. Most commonly, that is referred to as “trading sideways”.
The period of consolidation is natural, during that period, buyers and sellers cannot overcome each other, causing the price to remain in a certain range.
On the intra-day chart, Ethereum is visibly trading between a range of $1,517 to $1,590. Meaning that the price will likely remain under that frame rate until some major news breaks out that floods the market volume, making the asset break the resistance or support prices.
