Despite being on the back foot for some time, cryptocurrencies are beginning to experience a resurgence. Bitcoin and Ethereum have performed superbly in the last couple of days, extending their gains further. With their impeccable performance in the last two days, both digital assets are set to finish the month on a strong note, which will arguably be their best performing month since 2021.
While most cryptocurrencies are green, Bitcoin and Ethereum have performed slightly better. Their positive movement has been attributed to rising global market risk appetite and rumors of an Ethereum network upgrade.
In July alone, Bitcoin rallied by over 28%, while Ethereum, the second largest digital currency by market cap, rose 72% in July. Though most cryptocurrencies have taken a breather after Thursday’s rally, Bitcoin is trading above $24,000 for the first time in many months. Similarly, Ethereum is trading above $1,700 after a massive sell-off that saw it drop below $1000.
Another factor currently impacting the crypto market rally is the Fed’s recent interest rate hike of 75 basis points. With investors speculating that the Federal Reserve is done raising rates, most analysts expect speculative assets like cryptocurrencies to enjoy favorable liquidity, which will stook further actions.
Cryptocurrencies are slowly recovering from a massive sell-off this year that has seen most cryptocurrencies lose nearly 90% of their value from their all-time high. Bitcoin has lost nearly 65% of its value from its all-time high, while Ethereum shed nearly 75% percent.
The Ethereum network upgrade
Meanwhile, there are indications that Ethereum is set to move from the proof of work consensus mechanism to the much-anticipated proof of stake system, which has been lauded as more energy efficient. And should that be the case, analysts predict that Ethereum could rise towards the $2,000 significant level in the next couple of days.