Bitcoin may have fallen 65% since November 2021 above its all-time high of $69,000, but it had a good July: the biggest cryptocurrency is up 19% in the last 30 days, having its best month since last year. The digital asset was trading at $24,094 at the time of writing, according to CoinMarketCap. That’s a seven-day increase of nearly 3%. But more importantly, Bitcoin’s 30-day rally was the biggest high since October.
These can be seen as bullish signals as Bitcoin and the rest of the crypto market have been hit hard by rising inflation and a potential looming global recession. When the Fed raises interest rates, investors shy away from “risky” assets. This includes US stocks, but also Bitcoin (and other digital currencies and tokens), which are notoriously volatile.
On today’s data, the asset was better than expected — and still closely aligned with the U.S. stock market, a typical pattern seen in 2022. U.S. stocks were up for third day in a row on Friday and decided to get the best of them, in nearly two years. Investors appear less fearful of the Federal Reserve’s measures to cool inflation. And Bitcoin isn’t the only digital asset having a good month: Ethereum is currently trading at $1,745 — up 55% from 30 days.
As reported yesterday, this is probably related to the long-awaited and rapid development of the second largest cryptocurrency known as “The Merge“. Ethereum is expected to switch to a more efficient consensus mechanism called proof-of-stake by September. This upgrade will remove the need for miners, instead relying on validators to keep the network secure and process transactions by locking the native cryptocurrency into the blockchain. Some say the merger could have a deflationary impact on the cryptocurrency, leaving investors more optimistic than ever.
This trend may be short-lived for Bitcoin and Ethereum: if inflation remains high and digital assets continue to follow stocks, the bear market may continue to invest.
