Bitcoin (BTC) Tops $22,000 Before Inflation Data, Ethereum Consolidates

What is Ethereum Consolidation?

Bitcoin topped $22,000 as it continued a week-long rally ahead of US inflation data and a high prediction Ethereum Network Upgrade.

The world’s largest cryptocurrency hit $22,341.50 at 9:45 p.m. ET Sunday before falling slightly, according to CoinDesk data. Bitcoin was trading at $22,203 at around 4:03 a.m. ET on Monday.

After falling below $19,000 on Wednesday to its lowest level since JuneBitcoin has since grown about 17%.

This also appears on the back of a US stocks won last week. Bitcoin has a strong correlation with the stock market, especially Nasdaqand usually go higher when the high-tech index rises.

Crypto investors are looking to August consumer price index report expected to be released on Tuesday, to see where inflation is heading, which could offer hints about future policy moves by the US Federal Reserve.

Cryptocurrencies Face an Unusual Double This Week: U.S. Inflation Data and [hopefully] Ethereum merge is long awaited and not delayed. Hold your breath to ride the roller coaster.

Antoni Trenchev

co-founder, Nexo

Stocks have come under pressure this year as the Fed raised interest rates to try to control rampant inflation.

Cryptocurrencies, which are also risky assets, have been battered. Nearly $2 trillion has been wiped out of the entire crypto market since its all-time high in November. Bitcoin is down more than 50% this year.

That decline was also fueled by Crypto-specific issues including the collapse of important projects and bankruptcies were widespread throughout the industry.

Meanwhile, the Ethereum network will complete a long-awaited upgrade known as consolidation. This will change Ethereum blockchain from proof-of-work to proof-of-stake and significantly reduce the amount of energy required for the network to operate.

Supporters say this could pave the way for wider use etherthe token runs on Ethereum.

“Cryptocurrency faces an unusual double this week: US inflation data and [hopefully] Ethereum merge is long awaited and not delayed. Hold your breath for a roller coaster ride,” Antoni Trenchev, co-founder of Nexo, said in a note Monday.

“In a time filled with narratives, there is nothing bigger than Consolidation in Crypto and it is the event the wider world should take notice with Ethereum’s carbon footprint set to drop by 99 %.”

Read more about technology and crypto from CNBC Pro

However, analysts warn that the consolidation will does not necessarily speed up the Ethereum networkwhich is known to be slow, nor will it reduce the fees associated with transactions.

However, excitement is growing for the merger. Since ether hit a year low in mid-June, The price of the world’s second largest cryptocurrency has outstripped bitcoin. Ether is up more than 90% since June 19 while bitcoin is up just over 20%, raising questions about how much the consolidation has been valued.

The Federal Reserve also many expect rate hikes again next week when the Federal Open Market Committee (FOMC) met, it was another dark cloud hanging over the cryptocurrency market.

“Consolidation could trigger a ‘sell the truth’ situation in the crypto market and we still need to be careful for next week’s FOMC meeting. Bitcoin could continue to rise but it could last quite a while. short,” Yuya Hasegawa, a crypto market analyst at Japan’s Bitbank Exchange, said in a note Monday.

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