Prices extend rally as optimism in global markets grows over inflation data. Ethereum trades at three-week high. Ethereum blockchain upgrade looms. Read on to learn why. Bitcoin is the top cryptocurrency by market cap, trading at $22,282 over the past week.
Prices extend rally amid a brighter mood in global markets
Asian bourses have extended their winning momentum amid a better mood in global markets. The recent surge in global stocks is largely driven by a reversal in FII’s strategy, but other factors are helping as well. Retail investor support and a strong global economy are also helping. On Monday, South Korea’s Kospi led a rally of 0.6 per cent in MSCI’s broadest index of Asia-Pacific shares outside Japan. The Nikkei in Japan gained 0.3 per cent.
Meanwhile, US stock markets were mixed. The pound to US dollar currency pair extended its rally. The British currency will remain strong as long as the mood in global markets is positive. However, if global markets become overly bullish, it will be difficult for the pound to find support. Inflation data in the US in August was weaker than expected, leading investors to reduce expectations of further interest rate hikes from the US Federal Reserve. The softer US inflation data also boosted risk on currencies, which helped global stock markets rally.
Ether trades at a three-week high
Despite the recent Ethereum upgrade, there are a few downside risks. A higher-than-expected CPI print could lead to hardening expectations for more restrictive monetary systems, which would be detrimental to crypto selling prices. Meanwhile, a bumpy up grade could also cause investors to be cautious and hedging could be necessary.
Despite this, the currency is still up slightly, and it is trading above its 200-week moving average of $22,680. However, it is below its investor cost basis of $19,360, a crucial area of support. It is not clear whether the recent spike will persist. During the week, Ethereum was up about 5% in value and is headed for a third-week high before CPI data.
U.S. inflation ticks up
Bitcoin is cooling off in the wake of the latest inflation data in the U.S., but the cryptocurrency still stands at a three-week high. The leading cryptocurrency by market cap is up 11.6% to $22,282 as of Monday. Tuesday will see inflation data that will help shape the Federal Reserve’s outlook. A Reuters poll of analysts predicts that the U.S. will have 8.1% year-on-year inflation.
The US Bureau of Labor Statistics will release the Consumer Price Index on Tuesday. Expectations for this report are for little change, but an increased number could further reinforce expectations for tighter monetary policy, which is bad news for crypto prices. On top of the CPI report, Ethereum’s upgrade could cause investors some jitters this week.
Ethereum blockchain upgrade is looming
The Ethereum blockchain upgrade is just around the corner, and it could have major implications for the future of the cryptocurrency. The Merge, as it is now known, will fundamentally change the protocol. This upgrade is a key milestone in the development of Ethereum, and the core team has been working on it for years. However, it has been repeatedly delayed due to concerns about the security of the system. While Ethereum developers claim PoS is more secure, the fact is that many major blockchains use PoS.
As the second most valuable cryptocurrency in the world, ether is currently trading at all-time highs ahead of a major upgrade. Currently worth around US$500 billion, ether is only slightly less than half the value of the largest cryptocurrency, bitcoin. This looming upgrade is one of the biggest changes to the system since it was launched.