Bitcoin climbed Monday evening, breaking above the key psychological level of $30,000 as investors awaited key inflation data later in the week that could guide crypto prices.
The largest cryptocurrency by market cap rose 7% to $30,193.25 for the first time since June, according to Coin Metrics. Ether advanced more than 3.5% to $1,925.11 for the first time since August as investors awaited the latest tech upgrade to the Ethereum network, scheduled for Wednesday.
Now that bitcoin has reached $30,000, a move into the mid-30s will be “likely” if it continues with conviction and “would force short-term speculators to hedge and buy instead,” said James Lavish , managing partner of Bitcoin. Opportunity Fund. “Some investors are trying to position themselves before that,” he said.
Bitcoin (BTC) and Ether (ETH) since the beginning of the year
Traders are likely speculating that Wednesday’s consumer price index “could reach a level that would give the Fed reason to consider pausing rate hikes at the next meeting, giving assets a boost.” like bitcoin,” Lavish added.
Investors are also watching the latest reading of the producer price index, which is due out on Thursday.
Cryptocurrencies have rallied this year. Monday night’s action takes bitcoin’s year-to-date gains to over 80%, while ether has now added 60% for the year so far. Price movements for both crypto assets have historically followed a relatively consistent percentage trend, but the two major crypto assets “decoupled” in March, thanks to bitcoin’s “flight to quality” after bank closures.
Nevertheless, the two cryptocurrencies remain somewhat correlated at the moment and macro drivers continue to influence both assets. Upcoming inflation data will be critical in determining if or when the Fed will pause or end its rate hike campaign.
Meanwhile, Ether rose ahead of its planned “Shanghai” tech upgrade, which is expected to send a wave of negative selling pressure into the market as funds previously locked to Ethereum will be released in the coming weeks.