We are starting August, a month expected to be active for the cryptocurrency market, although it is not historically known for generating large gains. In fact, in Bitcoin's history, this month has only shown an increase three times.
Analysts point out that July was the best month for ETH in the last three years:
"ETH rose 55% in July. This was by far its best monthly performance in three years."
It is worth noting that on Wednesday, Ethereum celebrated 10 years since the creation of its first block, a milestone that marked the beginning of one of the most influential networks in the cryptocurrency ecosystem.
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What factors may influence the price of ETH in August?
Institutional investment will continue to be crucial for the price of ETH. In July, flows into ETFs significantly boosted prices. The influx of $2.3 billion into Ethereum ETFs in just one week demonstrates growing institutional interest in this cryptocurrency and reflects greater confidence in its technology.
Similarly, favorable regulation could continue to act as a catalyst. An example of this was the Genius Act, which recently boosted prices and directly benefited ETH.
Despite the 55% increase in July, the amount of ETH on centralized exchanges remains at very low levels, reaching the second lowest level in over a year. This scarcity of available supply reinforces the optimistic outlook for the asset.
However, there are also bearish factors to consider. One of them is the leveraged long positions in the range between $3,358 and $3,875. More than $5.78 billion in positions are concentrated in this area, according to Bitget data. A drop could trigger a wave of liquidations.
Another potential risk is Bitcoin losing its range between $118,000 and $117,000. A significant drop in BTC could drag Ethereum into a correction. However, if BTC remains at current levels or rises, ETH could benefit and continue to rise.
The performance of BTC, in turn, will depend on macroeconomic factors such as inflation, tariff decisions, and relevant geopolitical tensions.
Finally, an additional factor that may exert downward pressure is the amount of ETH currently undergoing deactivation. More than 700,000 ETH are in the withdrawal queue, the highest level in the last four years, according to ValidatorQueue data. This is an important indicator to be closely monitored.
Technical Analysis: Key Levels to Watch
In the charts, Ethereum continues to gain ground and shows no signs of immediate correction for now. The price is approaching the top of its two-week range and demonstrates enough strength to break this channel in the coming days.
ETH Chart Analysis: Key Levels.
ETH Chart Analysis: Key Levels.
With the start of August and the strong rise of ETH in July, many optimistic traders are aiming for the $4,000 mark. While this target is reasonable, short-term traders should carefully monitor timelines to make informed decisions.
The next key levels are:
$3,857: Critical resistance zone where strong selling pressure is concentrated. If the price surpasses this level in August, it will absorb a large part of the liquidation and pave the way for $4,000.
$3,508: Support zone. A drop below this level could frustrate bulls' attempts to reach new highs.
The RSI at 28 suggests that ETH is in oversold territory, increasing the possibility of a short-term technical recovery.
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Important data to keep in mind about ETH
US ETH spot ETFs continue to attract capital. Just on Tuesday, they recorded inflows of $218.64 million, according to SoSoValue data. This positive trend began on July 3 and has not stopped. In total, the accumulated inflows in July amount to $5.41 billion, the highest level since the launch of these products.
If Ethereum surpasses $4,000 soon, over $2 billion in short positions could be liquidated, according to the CoinGlass liquidation map. This move could trigger a short squeeze, further driving up the price.
Finally, the value of token unlocks will fall to about $3 billion, half of the more than $6 billion released in July. This decline could unexpectedly hinder the recent growth of the sector.
