That was certainly quick. Bitcoin has rallied 25% in less than two weeks, less than two weeks after cryptocurrencies hit a nadir in the aftermath of the FTX collapse, amid speculation that the cryptocurrency selloff late last year was too much and too fast.
Bitcoin is gaining momentum.
When the Consumer Price Index (CPI) report showed that inflation is slowing in the majority of the US economy last week, Bitcoin hit a two-month high of $18,856, up 8%, as investors hoped that the Federal Reserve would reverse, or at least soften, its rate hike policy. This implies that Bitcoin is also becoming macro, no longer serving as a hedge against inflation.
Furthermore, Bitcoin mining difficulty increased by more than 10% to 37.59 trillion on Sunday, a new all-time high. Mining difficulty tends to rise as a blockchain network grows, indicating increased activity. At 11: 30 p.m. New York time, the flagship cryptocurrency was trading at $21,130.
Ethereum Upgrade is on the Horizon
Ether, the native token of the Ethereum blockchain network, has gained more than 17% in the last week and is currently trading at $1,568 at 11: 30 PM New York time. Aside from macroeconomic factors, the upcoming Shanghai network upgrade, which will allow users to withdraw their staked Ether, has contributed to this momentum.
Simply put, the Shangahi upgrade comes after 'The Merge,' which in September 2022 switched the Ethereum blockchain network from proof-of-work to proof-of-stake. The Shanghai upgrade has a tentative completion date of March 2023.
Aside from Bitcoin and Ethereum, Avalanche, NEAR, Aave, Polkadot, and Solana have all increased in value over the last two weeks, helping the crypto market reclaim $1 trillion.
In conclusion
The market's surge has given investors hope that crypto will thrive despite layoffs and bankruptcy. Even a banking behemoth like Bank of America believes cryptos are the future and a new form of payment, predicting that they will change "how and when value is transferred over the next 15 years."
Traders are optimistic about the resurgence of the crypto bull market as markets recover, inflation cools, and signs of economic stability return.
Reviewed by Admin
on
January 18, 2023
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