Cumberland Explained The Reasons For The Price Rally Of Ethereum
Specialists from the over-the-counter cryptocurrency platform Cumberland said that the rally in Ethereum in July 2022 was due to fundamental factors and noted clients’ increased interest in the asset.
“While price movements in the recent past have been technical and largely macro-correlated, the most recent [rally] has been crypto-fundamental: Sepoila’s testnet was successfully transitioned to Proof-of-Stake on July 6, setting the stage for the mainnet migration in early fall.” analysts wrote.
Cumberland stressed that the emergence of a highly profitable and deflationary asset with a large capitalization is “a significant event for users and investors.” The company also noted that the transition of Ethereum to PoS will reduce the negative impact of blockchain on the environment.
“We are seeing a flood [of portfolio reallocations in ETH] through our APIs and OTC table: the ratio of buys and sells has changed a lot over the past week, and institutional companies were the buyers,” the publication says.
According to analysts, the described shift reflects the incentive structure of any volatile asset. They explained that it is easier for traders and investors to buy it on a “rebound” than on a local bottom.
The specialists emphasized that price fluctuations are pretty standard for young technological products. In their opinion, this is due to the relatively low liquidity of the market and the fact that users are still “evaluating the role” of Ethereum and decentralized applications based on this blockchain.
According to CoinGecko, Ethereum is up almost 35% over the past seven days. At the time of writing, the asset is trading near $1,500.