A rebound in U.S. stocks on hopes of reducing inflation also boosted the crypto market.
After reaching a high of over $25,000 for the first time since June, the price of bitcoin began to decline.
Stocks in the United States have risen on hopes that inflationary pressures are beginning to ease, and this has boosted the cryptocurrency market as well.
Bitcoin reached an all-time high of $25,000 for a short period of time in June before experiencing a precipitous decline. Since then, the cryptocurrency has been unable to make any major progress upward.
According to data provided by CoinDesk, the value of the digital coin that is considered to be the most valuable in the world rose beyond $25,000 for the first time since the middle of June.
At around 6:05 a.m. Eastern Standard Time on Monday, the price of bitcoin was trading at $24,178.52, which was a decrease of more than 2% from the previous twenty-four hour period.
Following a trend seen in stocks in the United States, cryptocurrency prices have been on the rise over the past month or two.
It has been observed that the value of digital currencies such as bitcoin is relatively tied to the movement of stock markets, in particular the tech-heavy Nasdaq, which has gained almost 12% over the course of the previous month.
After recent economic statistics indicated that inflationary pressures may be beginning to ease a little bit, investors have been more bullish.
Bitcoin experienced a gain of approximately 15% during the same time period, but year-to-date it is still down almost 48%.
The value of the cryptocurrency market has plummeted by trillions of dollars over the past few months, and a number of market participants have been plagued by bankruptcy and liquidity problems.
Since late June, the value of the cryptocurrency has been trading within a band of approximately $20,000 to $24,000. Despite the fact that it has exhibited signs of trying to push higher, it has been unable to generate a meaningful breakout. But there are now indications that a modest rally might take place.
According to Vijay Ayyar, vice president of corporate development and international at the cryptocurrency exchange Luno, who spoke with CNBC, “Bitcoin continues to exhibit indicators of bullishness mainly owing to higher highs and lows being made.”
A rally in alternative currency, commonly known as altcoins, can also be ascribed to Bitcoin’s price increase. During the past month, Ether’s price increased by 56%, far exceeding bitcoin’s growth.
This is the case because investors are looking forward to a significant and long-awaited upgrade to the Ethereum network, which has the potential to increase the speed at which transactions are processed. The native coin that operates on the Ethereum blockchain is referred to as ether.
The update, often known as the “merge,” successfully completed its last dress rehearsal the previous week.
This upswing in ether is also having a positive impact on bitcoin.
“Given the hype about the merge, likely set for the 15th of September, we’re seeing BTC catch up with ETH,” Ayyar said. “We’re seeing BTC catch up with ETH.”