Bitcoin price surged above $25,000 for the first time since mid-June before paring gains.
The price of the Bitcoin cryptocurrency briefly topped $25,000 for the first time since mid-June as momentum continued from colder-than-expected US inflation data and progress towards the big bet at Ethereum level.
The biggest cryptocurrency rose 2.2% on Sunday to hit $25,031, its highest level since June 13. It was trading around $24,750 as of 6 a.m. New York time, rising for a fifth straight day in a streak fueled by data from the U.S. Consumer Price Index. which came in below expectations. Ether gained as much as 2% to $2,030.50, after surging above $2,000 on Saturday for the first time since May 31 amid optimism that Ether’s much-awaited software upgrade will be completed. its blockchain known as Merge.
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“The next CPI print will be released just two days before the merger, at which time we expect a lot of pre-event momentum to be built into the market,” Fundstrat digital asset strategist Sean Farrell said in a note on Friday. “Long and mid-term investors should look to use any dips as buying opportunities.”
The crypto struggled in the first half of the year as the Federal Reserve hiked rates to combat stubbornly high inflation, with the prices of Bitcoin, Ether and other tokens falling more than 50%. With US inflation data coming in below expectations over the past week, potentially paving the way for less aggressive tightening action from the Fed, risk assets like the Nasdaq 100 index rose – helping to favor gains in crypto, which has been strongly correlated with stocks metrics for months.
“Beyond the increase in derivatives volumes, we also suspect that crypto-native investors may start to take on more risk,” Farrell said, citing an increase in the balance of wrapped Bitcoin, which can be used as guarantee in decentralized finance on Ethereum, in addition to an increase last week in the speed of stablecoins that indicates greater on-chain activity.
This adds up to positive developments for Ether, as the Ethereum blockchain merger is now likely to happen around September 15, network co-founder Vitalik Buterin said after a final testing stage known as Goerli a few days ago. The merger represents a transition in the way Ether tokens are minted and transactions are validated, away from mining blocks using complex computer puzzles under the proof-of-work method and towards proof-of-stake. Additionally, some investors are positioning themselves to potentially benefit from an eventual fork that would preserve the proof-of-work ether, according to Genesis Global Trading.
“Ether is currently being driven by new fundamentals (post-Merge tokenomics), a speculative element (the ETH PoW fork, much of which is still unknown) as well as global macro sentiment,” wrote strategists Noelle Acheson and Willis Croft. of Genesis. in a note on Friday. “Although taking a breather over the past few days, realized volatility has jumped from lows at the start of the year, which both reflects growing interest and reminds the broader investment universe that the Compelling stories about the crypto markets are never far away.”