The Ethereum recovery rally ended rather unexpectedly as the price of the second-highest cryptocurrency the market fell sharply after the opening of Asian markets.
As the chart provided by Alex Krueger shows, we have seen a relatively high volume of selling in the market as the Asian bears began to actively sell their holdings of ETH, bringing the liquidation volume in the Ethereum market to almost $100 million.
Asia woke up and decided to run all the stops. This is 10% of the 1 day round trip for ETH. pic.twitter.com/VgLxMSfWzf
— Alex Kruger (@krugermacro) July 25, 2022
In one day, Ether lost almost 10% of its value, marking the third failed attempt by the cryptocurrency to break the $1,600 threshold. Although Ethereum managed to gain a foothold above the 50-day moving average, the fate of the recovery rally is uncertain as ETH fails to reach new highs.
Some traders believe that what we are seeing in the cryptocurrency market today is a bear trap that will be the catalyst for another reversal that will push the price of the first cryptocurrency to new lows.
Deflation is not enough for Ethereum
With the upcoming Merge upgrade, Ethereum will finally go deflationary as net asset issuance hits -4.5%. Unfortunately, the fact that the supply of Ethereum will gradually decrease in the future is not enough to push the price of the asset to the new ATH.
As ETH market data shows, investors are reluctant to purchase more coins due to the reduced supply. The main driving force behind the creation of Buterin is the use and adoption that only comes with the rise of various use cases based on Ethereum.
At press time, Ethereum was struggling and consolidating around $1,525, having lost over 5% of its value in the last 24 hours and 10% from yesterday’s high.
Credit : u.today