Our article today is an Ethereum price and news analysis aiming at providing our readers with a monthly snapshot of both the price action and events impacting Ethereum price. The month of July is over now and the price of Ethereum had a wide range of ups and downs. The volatility in the price of Ethereum was due to multiple reasons so we will start by covering the events that took place during this period.
Events impacting Ethereum’s price in July
The positive news came from different countries from around the globe. We shared how South Korea’s Cryptocurrency bill is in the works and is aiming to enhance investors’ experience. The Bill also highlighted how South Koreans are big on Ethereum. We also shared how Bitcoin options are going to be available to the American market wihin a month and that Ethereum options could possibly be next.
A major catalyst came from the Enterprise Ethereum Alliance adding 34 new members including CISCO, the Government of India, BNS and Mastercard among others. The additions happened in the midst of Ethereum’s spectacular retrace that started in June and have contributed to helping Ethereum hold it’s price amid concerns in the Cryptocurrency ecosystem.
The SEC announced during the month of July that they will be sharing a ruling on ICOs which triggered concerns of this reducing the amount of ICOs. Since most ICOs are Ethereum based this had put a tremendous amount of pressure on it’s price. We are including this in the positive news section because we believe it will be a short term “pain” for a long term gain. This is actually a huge step that will eventually bring Cryptocurrency related investments to traditional investors.
Concerns with Ethereum and other Cryptocurrencies remain the risks related to hacking and security. Two incidents were in the news in July that we believe have contributed to Ethereum not following Bitcoin’s price increase during it’s initial recovery when miners started signaling Segwit. The incidents in question were the $30 Million Ethers that were reported as stolen in addition to another $7 Millions were reported stolen after a hack on Coindash earlier this week.
During the month of June and July, the event that we believe influenced the price of Ethereum and ALL other cryptocurrencies the most is Bitcoin’s potential fork. We heard all kind of different scenarios and traditional media calling it “The Cryptocurrency Bubble Bursting”. Now that the upgrade started and Bitcoin officially split into 2 currencies, the price of Ethereum has not only recovered but broke out its descending channel.
Ethereum’s Price action analysis for July
Our Team provided an extensive coverage of Ethereum’s and Bitcoin’s price action during the month of July and especially prior to Segwit activation. As of Mid-June, Ethereum’s price was in a descending channel. We identified $200 as an important support level, followed by $175 and ultimately $125 as key levels that Ethereum needs to hold to keep a Bullish level.
Those levels were spot on and Ethereum maintained decent support. In fact, the price was mostly hovering around the $200 level as you can see in the chart below. Till the last week of the month, Ethereum’s price was still under pressure. We published the following that we would like to re-iterate as it sums up the essence of investing in Cryptocurrencies in general:
This is when we think it’s important to remind our readers of why it is crucial to know and understand any product they decide to invest in. If you know Cryptocurrencies and understand that this is a fairly new ecosystem, you should be comfortable at the prospects of the current and upcoming volatility in the price of Bitcoin and Cryptocurrencies in general. You would know that technical and security challenges will be the bumps in the road and would very often represent great buying opportunities. They also represent one if not the most important risk associated to investing in Cryptocurrencies, and you should be fine with that as long as you are doing your part in keeping yourself informed about what’s happening.
In short, investing in Cryptocurrencies is a textbook example of a high risk high reward investment and to see what that high reward looks like, just look at the evolution of the price of Ethereum for instance or the price of Bitcoin.
You can see in the chart of July that in hindsight, it was a buying opportunity indeed, as now the price has clearly recovered and is going higher everyday. The Breakout was confirmed during the last week of July.
For more information on Ethereum price evolution, read our recap of the price of Ethereum for June and the 1st half of the month of July. You can also read about Ethereum’s price during the week of July the 23rd
And since Bitcoin’s Segwit was THE event everyone was watching in July, our monthly review cannot be complete without a comparison of Ethereum’s price action with Bitcoin.
In the chart below, we have 3 distinct areas:
Area # 1 from the left is before the miners started signaling Segwit. During this period, Ethereum’s price was over performing compared to Bitcoin.
Area # 2 is after the miners signaled Segwit, this is when the pressure eased on Bitcoin’s price now that the risk of a hard fork was “reduced”. This area is when a disconnect happened between Bitcoin and Ethereum’s performance in July and the latter started lagging as it was struggling with concerns regarding hacking and the SEC regulating ICOs.
Area # 3 starts on August 1st initially with a weakening of Bitcoin after the launch of Bitcoin Cash followed by a quick recovery. Ethereum’s price isn’t lagging anymore and we have witnessed a Breakout of it’s price with the beginning of August.
To conclude, we saw a lot of volatility for the month of August followed by a spectacular recovery for both Ethereum and Bitcoin. Stay tuned for an update on important price levels to watch for the month of August.