Bitcoin Rally Cools Ahead of CPI Data, Ethereum Network Upgrade

Source From: ENT 2022-09-12 02:47:56

A rally in Bitcoin is cooling as traders await US inflation data and monitor a seminal upgrade of the Ethereum blockchain, events that could stir volatility in cryptocurrency markets.

The largest token rose as much as 3.3% on Monday, briefly scaling $22,000 before falling back to trade little changed as of 1:16 p.m. in Tokyo. Ether along with smaller coins like Cardano and Solana were on the back foot.

Higher-than-expected US inflation on Tuesday could harden expectations for restrictive monetary settings that are anathema for crypto prices. Any bumps in the upgrade later this week of Ethereum -- the most important crypto network commercially -- also have the potential to sow disquiet.

Bitcoin jumped about 10% on Sept. 9 amid a broader embrace of beaten-down assets encouraged by a weaker dollar that hinted at a little less fear in a tough year for global markets. 

A blackout period for comments from Federal Reserve officials before the US central bank’s interest-rate decision later this month may be one of the factors helping Bitcoin, according to Tony Sycamore, senior market analyst for City Index Ltd. in Sydney.

“The market knows that it’s got a break from this unrelenting hawkish Fedspeak for a couple of weeks and that the pace of central bank rate hikes is likely to slow,” he said.

Rising borrowing costs alongside blowups at crypto lenders and hedge funds have saddled Bitcoin, Ether and the wider MVIS CryptoCompare Digital Assets 100 Index with losses of more than 50% in 2022.