Ethereum Price Prediction: BTCS increases the position by $270 million, ETH overcomes the overheating challenge of the $4000 milestone

Ethereum (ETH) price slightly reduced its gains, currently reporting around 3,786 USD in the Asian morning session today (29). BTCS Inc increased its ETH holdings to 270 million USD. Ethereum rose 53% in July, marking the second bullish month of the year, paving the way for potential profits in the third quarter.

A report from CoinShares shows that last week, institutional investor demand for Ethereum as an alternative investment product became the focus, with inflows reaching $1.59 billion. In contrast, Bitcoin (BTC) experienced a slight outflow, totaling only $175 million.

If institutional and retail interest stabilizes in the coming days and weeks, Ethereum may maintain its upward trend and attempt to narrow the gap with the historical high of $4,878. The derivatives market reflects interest in the token, particularly as the open interest (OI) in futures remains at a peak level of $58 billion.

BTCS adds 14,240 ETH holdings

BTCS announced on Monday that it has purchased an additional 14,240 ETH at an average price of $3,850, bringing its total holdings to 70,028 ETH, valued at approximately $270 million.

This company, focused on blockchain technology (also known as blockchain technology consensus solutions), has completed the issuance of $10 million in convertible notes, with a conversion price of approximately $13 per share.

BTCS CEO Charles Allen stated that the company's decentralized finance (DeFi)/traditional finance (TradFi) flywheel strategy has been strengthened and will continue to generate income and returns for shareholders through proof-of-stake protocols such as NodeOps and Builder+.

Allen stated in the press release: "We are actively deploying capital, not only to expand our ETH funding but also to drive our blockchain infrastructure operations, and we are proud to continue developing into the Ethereum company with the highest financial and operational leverage in today's public markets."

BTCS has raised $207 million to date this year, supporting its strategic goals of increasing its Ethereum holdings and enhancing shareholder value.

At the same time, institutional and retail interest in ETH has driven its price up by 53% in July. If the upward trend stabilizes or the price consolidates at a high level, Ethereum is expected to close higher in July, marking the arrival of the second profitable month of the year and bringing a good start to the third quarter.

According to CryptoQuant data, ETH surged by 41.1% in May, while the average trend in the other months showed a decline, as shown in the figure below.

(Source: CryptoQuant)

Technical Outlook: ETH Bulls Break Free from Overheated Market Conditions

The price of Ethereum adjusted slightly after reaching a high of $3,941 during the session, currently maintaining above the session low of $3,774. This minor pullback reflects the overall sentiment in the cryptocurrency market, with Bitcoin still close to the support level of $118,000.

Key technical indicators reveal an overheated market condition, which may force traders to act cautiously in the coming trading days and indicate a potential pullback. Although the Relative Strength Index (RSI) has dropped to 76, it remains in the overbought territory. A continued decline would indicate reduced demand and could lead to a price retracement.

Traders should also pay attention to the Moving Average Convergence Divergence (MACD) indicator. If the downside risk persists, this indicator may confirm a sell signal. Such a signal occurs when the blue MACD line crosses below the red signal line, alerting investors to consider reducing their holdings.

Nevertheless, Ethereum remains well above key moving averages, including the 50-day Exponential Moving Average (EMA) at $3,032, the 100-day Exponential Moving Average at $2,752, and the 200-day Exponential Moving Average at $2,650. If Ethereum significantly reduces its gains, these moving averages could become potential support levels. All eyes will be on the $4,000 milestone, and if it breaks through that milestone, it could trigger risk appetite sentiment and push the ETH price towards historic highs.

(Source: Trading View)