July Outlook: Locked and loaded
Prices push lower as the chickens of 2014 come home to roost. Governments sell seized BTC while Mt. Gox coins are moving. Free from such issues, ETH is set to outperform as its ETF journey continues, but traders should not view this as a short-term play.The chickens of 2014 have come home to roost
Mt. Gox has announced that they will initiate BTC and BCH distributions in July. The market always readjusts to changing information, and BTC naturally pushed lower as traders prepared for upcoming sales pressure. However, knowing that the supply is being released fundamentally differs from absorbing it once it hits the order books. This event consists of a significant unknown. Will the corn be sold? Some creditors will sell, while others will opt to hold. If the sales pressure is soft, the event could be a curve ball to our market take. Nonetheless, we expect net selling pressure to burden bitcoin in an otherwise dry summer market, widening the chop suey range until rosier days arise as the leaves turn orange. In companionship with Mt. Gox distributions, Governments are doing their part in pushing 2014-era coins onto the order books, as both Germany and the U.S. have sold BTC in the past week. The German government consistently distributes coins to exchanges to sell, reducing its BTC balance from 49.8k BTC to 43.8k BTC over the past two weeks. While nothing is announced, we can expect these wallet balances to gradually diminish over the coming months. The current German efficiency suggests that the market will have to absorb 500 BTC every single weekday for the next 18 weeks. This could further limit BTC’s near term ability to thrive. ETH’s golden egg is cooking
Ether ETFs are expected to launch in July, with the actual launch date remaining frustratingly unclear. While the launch timing is less than ideal, we maintain a bullish ETH outlook in anticipation of net inflows equivalent to 0.75-1% of ETH’s circulating supply in the five months following the launch. The market seemingly disagrees with our position, as ETHBTC remains stubbornly stagnant at 0.055 alongside ETH futures trading at discounts relative to BTC. This may stem from an anticipated sell-the-news launch, which makes sense from a short-term perspective.It’s natural to expect ETH’s initial ETF reaction to resemble BTC’s. Over short time frames, the ETH ETF launch could very well be a sell-the-news event similar to the BTC ETF launch. Bitcoin did indeed see a 13-day return of -21.5% following the ETF launch, stemming from GBTC outflows. Grayscale is also a force to be reckoned with in ETH, setting the stage for a pattern repetition in ETH. Despite this, we are not in the market for short-term strategies during a choppy summer. ETFs are a solid catalyst for relative ETH strength as the summer progresses and flows accumulate, and I firmly view current ETHBTC prices as a bargain for the patient trader. Supply effects in favor of ETH
My positioning for July remains unchanged from June. I abide with the assumption that positive supply dynamics in ETH and negative supply dynamics in BTC favor relative ETH strength in the next months and maintain aggressive ETH exposure. 
