Experts at the over-the-counter cryptocurrency trading platform Cumberland said that Ethereum’s rally in July 2022 was driven by fundamental factors, and noted growing client interest in the asset.
While the price action of the recent past has been technical and highly macro-correlated, this move has been crypto-fundamental: the Sepolia testnet successfully merged to proof-of-stake on July 6th, setting the stage for an early-autumn mainnet merge.
— Cumberland (@CumberlandSays) July 21, 2022
“While price movements in the recent past were technical and largely macro-correlated, the latest rally was crypto-fundamental: on July 6 the Sepolia testnet was successfully migrated to Proof-of-Stake, laying the groundwork for mainnet migration in early autumn,” the analysts wrote.
In Cumberland, they stressed that the emergence of a high-capitalisation asset that is yielding and deflationary is “extremely important” for users and investors. The company also noted that Ethereum’s transition to PoS will reduce the blockchain’s negative environmental impact.
“We are observing a flow of portfolio reallocations into ETH through our APIs and the OTC desk: the buy-to-sell ratio over the past week has shifted significantly, and buyers were institutional companies,” the publication says.
Analysts say the described shift reflects the incentive structure of any volatile asset. They explained that traders and investors find it easier to buy it on a rebound than at a local bottom.
Experts emphasise that price fluctuations are entirely normal for young tech products. In their view, this is linked to relatively low market liquidity and the fact that users are still “assessing the role” of Ethereum and decentralised applications built on this blockchain.
According to CoinGecko, Ethereum prices rose by almost 35% over the last seven days. As of writing the asset was trading near $1,500.
In July 2022, Ethereum developers agreed on the schedule for the network’s transition to PoS. The migration is preliminarily planned for September 19.
Read ForkLog’s Bitcoin news on our Telegram — cryptocurrency news, prices and analytics.