On Monday evening, Bitcoin climbed, topping the key psychological level of $30,000 as investors awaited key inflation data later in the week that could run crypto prices.
The largest cryptocurrency by market cap climbed 7% to $30,193.25 for the first time since June, according to Coin Metrics. Ether increased more than 3.5% to $1,925.11 for the first time since August as investors awaited the Ethereum network’s latest tech upgrade, scheduled for Wednesday.
From about 10 a.m to 11 a.m. ET (14:00-15:00 UTC), bitcoin increased nearly 4%. It had been staying closer to $28,000 since mid-March when worries about the conventional banking system began to decline.
Now that bitcoin has touched $30,000, a move into the mid-to high-30s will be likely if it moves through with conviction and would force short speculators to cover and buy instead, said James Lavish, managing partner at the Bitcoin Opportunity Fund. Some investors are trying to get positioned ahead of that, he said.
Traders are likely assuming that Wednesday’s consumer price index number could come in at a level that gives the Fed reason to think about halting increasing rates in the next meeting, thereby giving a boost to assets like bitcoin.”
Lavish added.
Investors are also monitoring the latest reading on the producer price index, due out Thursday.
Cryptocurrencies have been rallying this year. Monday night’s action obtains Bitcoin’s year-to-date gains to more than 80%, while Ether has now added 60% for the year so far. Price moves for the two crypto assets have historically stalked relatively in line on a percentage basis, but the top two crypto-assets “decoupled” in March, thanks to a “flight to quality” in bitcoin following bank closures.
Nevertheless, the two cryptocurrencies remain somewhat correlated for the time being, and macro drivers continue to influence both assets. The upcoming inflation data will be key in deciding if or when the Fed will pause or put an end to its rate-hiking campaign.
Meanwhile, Ether has been ascending ahead of its planned “Shanghai” tech upgrade, which is expected to bring a wave of negative sell pressure on the market as previously locked funds on Ethereum are released over the next few weeks.
