Bitcoin surged Monday night, surpassing the key psychological $30,000 level as investors await key inflation data later in the week that could steer crypto prices.
The largest cryptocurrency by market cap surged 7% to $30,193.25 for the first time since June, according to Coin Metrics. Ether is up more than 3.5% to $1,925.11 for the first time since August as investors await the Ethereum network’s latest technical upgrade, which is scheduled for Wednesday.
Now that Bitcoin has touched $30,000, a move into the mid-to-high 30s becomes “probable” if it prevails with conviction and “would force short speculators to stock and buy instead.” said James Lavish, managing partner at Bitcoin Opportunity Fund. “Some investors are trying to position themselves before that,” he said.
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Bitcoin (BTC) and Ether (ETH) YTD
Traders are likely speculating that Wednesday’s CPI could “reach levels that give the Fed reason to consider pausing rate hikes at the next meeting, thereby boosting assets 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 more than 80%, while Ether is up 60% year-to-date. Price movements for the two cryptoassets have historically been relatively even on a percentage basis, but the top two cryptoassets “decoupled” in March thanks to a “flight to quality” in Bitcoin following bank closures.
Still, the two cryptocurrencies remain somewhat correlated for now and macro drivers continue to affect both assets. The upcoming inflation data will be crucial in determining if and when the Fed will pause or end its rate hike campaign.
Meanwhile, Ether has risen ahead of its planned technology upgrade “Shanghai,” which is expected to bring a wave of negative selling pressure to the market as previously locked funds on Ethereum are released over the next few weeks.
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