Failed Historical High Update and ETH Correction Beginning

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Failed Historical High Update and ETH Correction Beginning

The new trading week on the ETH market started with sourness. At the time of writing, sellers have almost completely destroyed all the achievements of buyers in the previous week.

And the achievements were considerable. Buyers raised the ETH price by almost 35% last week and tested the critical range of $1260-1350. In the previous article, we wrote about the importance of this range in ETH market history.

Besides, this price zone’s seriousness is confirmed by last week’s trading volumes, which were the highest for the entire period of ETH existence.

ETH
Source: Trading View

This record for volumes on the one hand is gratifying, as high volumes indicate interest in the coin. However, if you compare the efforts of buyers and the weekly candle size – it becomes clear that the price rested against the strong walls of sellers seeking correction.

Who is to blame, Bitcoin?

Basically, the sharp correction in the ETH market began due to the beginning of the BTC price fall. Having fallen by almost 20% since 10 January, Bitcoin has pulled all crypto and DeFi markets. An interesting fact is that a new fall momentum began to form over the weekend.

The previous weekend gave investors a new growth momentum in the ETH market. The love of making important decisions on the weekends in the crypto world is becoming regular. At the moment, it is important to understand in time the nature of the price fall in the ETH market.

The inability of buyers to update the historical high and the concentration of major trading volumes in the range of $1190- $ 1250 may have bad consequences for the local growth trend. The critical point of buyers’ initiative, which they have been confidently holding since 24 December, is at $930.

ETH

Below this mark, sellers will seize power in the market and aim at the range of $710-740.

The ETH market growth was faster than the growth of new ETH 2 validators

ETH
Source: Glassnode

The great interest of investors in ETH has put additional strain on the Ethereum platform. This is evidenced by the gas price chart, which shows a significant price increase in 2 times in the period from 1 to 4 January.

Sharp price fluctuations in the ETH market continue to negatively affect the DeFi space development. The young Ethereum 2.0 is not yet quite good at providing the DeFi ecosystem scaling option.

The problem lies in the weak growth dynamics in the number of validators, which should ensure the strength and steadfastness of the platform. After 24 December, the growth of new validators is moving in a stable range.

Their organic growth was insufficient during the storming of buyers in the critical range of $1260-1350. Therefore, the issue of scaling and gas price with the rapid development of the ETH market is still open.

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Peter Oleshchuk

Peter is a crypto analyst who after getting acquainted with the cryptocurrency market in 2017, immediately transferred it to the friend zone. Peter's passion is analysis and forecasting of the cryptocurrency market, including the DeFi space. In his articles you will find accuracy and prudence.

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