3 Reasons Investors Might Choose Ethereum in July
NOIDA (CoinChapter.com) – With the German government and the Mt. Gox trustee preparing for a massive sell-off of Bitcoin, the cryptocurrency market is set to face significant pressure, and in July, Ethereum prices could benefit from market sentiment.
The German government recently announced plans to liquidate the majority of its Bitcoin holdings, valued at hundreds of millions of dollars. Meanwhile, the Mt. Gox trustee is preparing to release approximately 140,000 Bitcoins to the market.
These moves put considerable downward pressure on Bitcoin, with knock-on effects across the entire cryptocurrency market. In this context, Ethereum has become a compelling option for investors with its strong technical foundation and growing ecosystem.
Strong Market Fundamentals: Analyzing Ethereum’s Charts
Ethereum’s market fundamentals make it a top pick for investors in July. Recent data from Glassnode highlights several bullish indicators. Net transfers from exchanges show a large outflow of funds, and negative spikes indicate continued accumulation.
For example, on June 1, 2024, net outflows reached nearly 360,000 ETH, marking an outflow of funds from exchanges. This trend indicates reduced selling pressure and increased holdings, which is a bullish sign, and investors expect Ethereum prices to rise in July.
Furthermore, the distribution of Ethereum held by different addresses shows a healthy redistribution. Addresses holding between 1,000 and 10,000 ETH increased from 11.9 million ETH at the end of May to over 12.1 million ETH in mid-June.
The accumulation of medium-sized holders indicates increased confidence in Ethereum’s long-term value proposition, which may have helped push up the price of its token in July.
Meanwhile, the OI-weighted funding rate remains consistently positive, reflecting the bullish sentiment of futures traders. As of June 24, 2024, the funding rate is approximately 0.015%, which means that traders are willing to pay a premium to take long trades and expect further price increases.
Bitcoin sell-off: an opportunity for Ethereum?
Massive Bitcoin sell-offs by the German government and Mt. Gox present strategic opportunities for Ethereum, which has emerged as a prime candidate as Bitcoin faces downward pressure and investors seek alternatives to hedge against volatility.
The German government’s decision to liquidate its Bitcoin holdings worth hundreds of millions of dollars, coupled with the upcoming release of approximately 140,000 Bitcoins, has created uncertainty about Bitcoin’s short-term price stability.
In contrast, Ethereum’s strong fundamentals made it an attractive investment option in July. Ethereum 2.0, an upgrade designed to improve scalability and reduce transaction costs, has enhanced its appeal.
Historical trends show that when Bitcoin experiences a major sell-off, liquidity usually flows into Ethereum, pushing up its price. The increased opening volume of ETH futures, which reached a peak of $15 billion, reflects the growing confidence of institutions in the future of Ethereum.
Bullish technical formation favors Ethereum’s July outlook
Another reason why Ethereum could be a choice for investors in July is a bullish formation known as an “ascending triangle.”
Historically, a horizontal trendline connecting the swing highs and an uptrend line connecting the swing lows form an ascending triangle pattern. Additionally, volume helps determine if the breakout is strong. In ideal conditions, buyers enter the market when the trendlines are approaching each other.
As a result, the price of the coin will push above the horizontal resistance and will be accompanied by high volumes.
According to the rules of technical analysis, the price target of the breakout is equal to the height of the triangle at its widest point. If this bullish pattern holds, ETH’s theoretical price target is close to $6,010, which is 79% higher than the current level.