Bitcoin tops $22,000, hitting highest in nearly a month ahead of inflation data and Ethereum merge

Bitcoin topped $22,000 arsenic it continues a week-long rally up of U.S. ostentation information and a highly anticipated Ethereum web upgrade.

The world's largest cryptocurrency deed $22,341.50 astatine 9:45 p.m. ET Sunday earlier dipping slightly, according to CoinDesk data. Bitcoin was trading astatine $22,203 astatine astir 4:03 a.m. ET connected Monday.

After falling beneath $19,000 connected Wednesday to its lowest level since June, bitcoin has since rallied astir 17%.

This besides comes disconnected the backmost of a winning week past week for U.S. stocks. Bitcoin has been intimately correlated to equity markets, peculiarly the Nasdaq, and often moves higher erstwhile the tech-heavy scale rises.

Crypto investors are looking up to the August user terms scale report, scheduled to beryllium released Tuesday, to spot the absorption ostentation is headed which could springiness hints toward aboriginal argumentation moves by the U.S. Federal Reserve.

Stocks person been nether unit this twelvemonth arsenic the Fed has hiked involvement rates to effort to power rampant inflation.

Cryptocurrencies, which are besides hazard assets, person been battered. Nearly $2 trillion has been wiped disconnected the full crypto marketplace since its all-time precocious successful November. Bitcoin is down much than 50% this year.

That diminution has besides been driven by crypto-specific issues including the illness of cardinal projects and bankruptcies that person dispersed crossed the industry.

Meanwhile, the Ethereum web volition implicit a long-awaited upgrade called the merge. This volition alteration the Ethereum blockchain from a proof-of-work to proof-of-stake model and importantly trim the magnitude of vigor required for the web to operate.

Proponents accidental this could pave the mode for a broader usage of ether, the token that runs connected Ethereum.

"Crypto faces an antithetic treble whammy this week: U.S. ostentation information and [hopefully] the long-awaited and oft-delayed Ethereum Merge. Hold your enactment for a rollercoaster ride," Antoni Trenchev, co-founder of Nexo, said successful a enactment connected Monday.

"In a clip awash with narratives, there's nary bigger than the Merge successful crypto and it's 1 which the wider satellite should instrumentality announcement of with Ethereum's c footprint acceptable to beryllium slashed by 99%."

However, analysts cautioned that the merge volition not needfully velocity up the Ethereum network, which is known to beryllium slow, nor volition it trim the fees associated with transactions.

Still, excitement has been increasing for the merge. Since ether deed its debased for the twelvemonth successful mid-June, the terms for the world's second-largest cryptocurrency has acold outpaced bitcoin's. Ether is up much than 90% since June. 19 portion bitcoin has risen conscionable implicit 20%, begging the question of however overmuch the merge has already been priced in.

The Federal Reserve is besides widely expected to summation involvement rates again adjacent week erstwhile its Federal Open Market Committee (FOMC) meets, which is different acheronian unreality hanging implicit the crypto market.

"The Merge whitethorn trigger a 'sell the fact' concern successful the crypto marketplace and we inactive request to beryllium cautious for adjacent week's FOMC meeting. Bitcoin could proceed to rally but it could beryllium rather abbreviated lived," Yuya Hasegawa, crypto marketplace expert astatine Japanese speech Bitbank, said successful a enactment Monday.