Bitcoin is at 10-month highs. But Ether outperforms after the Shanghai upgrade.
The price of Bitcoin has risen 1% over the past 24 hours to near $30,250, with the biggest digital asset trading around its highest level since last June after breaking through the key $30,000 level late Monday. The $30,000 level is psychologically important because it represents where Bitcoin stood last summer before a series of business failures in the crypto industry turned a selloff into a brutal bear market.
“Bitcoin is consolidating around the $30,000 mark for the third day, moving in a tight $20,700 to $30,300 range,” said Alex Kuptsikevich, an analyst at brokerage FxPro. “The $30,000 mark was significant for Bitcoin in 2021 and the first half of 2022, acting as a market mode switch. Last year, Bitcoin consolidated around this price for about five weeks before plunging sharply. There is a greater chance of a mirror dynamic, where the bulls takes a long time to gather strength before making a decisive move higher.”
Bitcoin will likely continue to react to macroeconomic forces that also affect the stock market, and fluctuate in tandem
Dow Jones Industrial Average
and
S&P 500.
The focus is on the future of interest rates and monetary policy from the Federal Reserve. Decades of high inflation pushed the Fed to tighten monetary conditions dramatically last year — a major headwind for both socks and cryptos — but the 2023 surge in crypto has come amid expectations that the central bank will be more accommodating. Economic data coming this week will be important in shaping the narrative.
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More immediately, crypto traders are focused on
Ether
after the Ethereum blockchain network completed its critical “Shanghai” upgrade late Wednesday. Ether prices outperformed, up 6% in the last 24 hours and approaching the $2,000 mark.
Shanghai is the biggest change to the Ethereum ecosystem since last year’s “Merge,” which transformed the network from a Bitcoin-style energy-intensive “proof of work” system to “proof of stake.” Under proof of stake, participating owners of Ether unlock their tokens as collateral while validating transactions and securing the network, earning interest in the process.
The Shanghai upgrade allows these tokens to start being withdrawn, raising the possibility of selling pressure as some investors extract Ether and sell it. But the Shanghai upgrade, which will make staking easier, is also expected to make trading more popular, which should support prices. For now, it seems that the sales pressure has been eased after the successful upgrade.
Beyond Bitcoin and Ether, smaller cryptos or altcoins were also higher, with
Cardano
and
Polygon
each climb 4%. Memecoins were also up, with
Dogecoin
up 4% and
Shiba Inu
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rises 2%.
Write to Jack Denton at [email protected]
