On the eve of the release of the U.S. Consumer Price Index (CPI), Bitcoin continued its rebound trend over the weekend, breaking through the $22,000 mark twice today (12), hitting a new high in nearly a month.
After falling below $19,000 last Wednesday, hitting its lowest level since June, bitcoin is up around 17% so far to $22,227 at press time, up 2.4% in the past 24 hours, according to CoinGecko.
Looking ahead to this week, cryptocurrency investors are waiting for the latest August CPI data to be released tomorrow night (13) in the United States, hoping to see inflation cool down and to get a glimpse of the future rate hike path of the Federal Reserve (Fed).
The stock market continues to face correction pressure this year as the Fed continues to raise interest rates to curb inflation and raise interest rates to try to control rampant inflation, while cryptocurrencies, which are also risk assets, have also been hit hard, and the collapse of the Terra ecosystem has made cryptocurrencies even more The market is even worse. Since hitting an all-time high of $69,000 in November, Bitcoin has more than halved so far, wiping nearly $2 trillion off the overall cryptocurrency market value.
Also this week, the Ethereum network will complete a long-awaited merger upgrade that will see Ethereum transition from a proof-of-work (PoW) mechanism to a proof-of-stake (PoS) mechanism, significantly reducing the energy consumed by the network to operate.
“Crypto markets face an unusual double whammy this week: U.S. CPI inflation data and the long-awaited and oft-delayed ethereum merger,” Nexo co-founder Antoni Trenchev said in a report. “Hold your breath, wait.” Ride the roller coaster!”
However, analysts cautioned that the merger would not necessarily increase the speed of the Ethereum network nor reduce transaction fees.
Still, investor enthusiasm for the merger upgrade has been growing. Since hitting a low for the year in mid-June, ether has risen more than 90% so far, outperforming bitcoin by a wide margin.
Meanwhile, markets are also expecting a 3-yard rate hike at the Federal Open Market Committee (FOMC) meeting next week, another dark cloud hanging over the cryptocurrency market.
Yuya Hasegawa, a cryptocurrency market analyst at Japanese exchange Bitbank, said:
After the merger upgrade, the cryptocurrency market may see a “sell the fact” (Sell the fact) situation, and we need to be cautious about next week’s FOMC meeting. Bitcoin may continue to rise, but probably not for long.