An analyst from top American investment bank JPMorgan said that Bitcoin (BTC) and Ethereum (ETH) have “found a floor” after seeing gains in July.
Bitcoin fell as much as 75% from its peak but it has surged from its mid-June low of sub-$19k, along with Ethereum which is up 102% from its own low of sub-$1k.
Positive news on Ethereum merge
In a note to clients on Monday, Kenneth Worthington pointed out that the dramatic billion dollar losses of TerraUSD (UST) and Luna (LUNA) helped pump major cryptocurrencies.
“What has helped, we think, has been more limited new contagion from the collapse of Terra/Luna. However, we think the real driver has been the Ethereum (ETH) merge and positive data following the launch of the Sapolia testnet in early July and Ropsten testnet in June, indicating the merge is viable in 2022,” Worthington wrote.
Bitcoin (BTC) buyers made gains of 21% in July while Ethereum (ETH) pumped 59% over May prices on the back of positive news for its transition from Proof-of-Work to Proof-of-Stake, which is highly anticipated by investors – the system is supposed to make the network faster and more efficient when mining.
Coins “bottomed” in mid-June
According to his analysis it appears that Bitcoin and Ethereum “bottomed” in mid-June and a successful Ethereum merge should help boost sentiment in the wider crypto markets later this year.
The merge is expected to take place in September, dependent on how the Georli testnet performs on August 11.
Decentralized Finance (DeFi) also rose 22% in July and Worthington added: “Given DeFi tends to be built on Ethereum, the amelioration of earlier concerns on DeFi together with the better reports about the Ethereum Merge are likely driving the particularly strong price appreciation of ETH relative to [b]itcoin.”
The top 100 coins gained a total of 36% in July, a strong resurgence from the previous month. However, that still represents a 54% loss in the crypto market for 2022 amid global macroeconomic fears. The NFT market is down 84% year-on-year, JPMorgan said.
Trading volume also fell in July despite prices rising, with Worthington adding: “However, volume in late July was 40% higher than early July, helped by the Ethereum Merge.”
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