Bitcoin passed the $25,000 level late on Saturday night for the first time since June 13. By Sunday morning it had lost steam and fallen back to $24,510 on CoinMarketCap at the time of writing, a sign that $25,000 is likely to remain a key resistance level for the largest cryptocurrency for the time being.
Bitcoin is up just 5.85% in the past week, while No. 2 Ethereum is up 16% in that time on anticipation of the network’s upcoming merge to a proof-of-stake model.
Bitcoin’s bump may be partly thanks to cooling inflation: the key economic indicator remained unchanged last month as the Federal Reserve’s interest rate hikes appeared to be countering rising prices.
Bitcoin and the rest of the crypto market (along with other assets like stocks and bonds) have been hit hard all summer by rising inflation and a potential imminent global recession.
The Fed in turn has raised interest rates, and this has created a risk-off environment in which investors have dumped crypto and volatile tech stocks to hold onto greenbacks.
Bitcoin was previously thought to be an inflation hedge, but its label as an anti-inflationary “digital gold” has been tested this year: it has instead closely correlated with tech stocks.
Despite its recent signs of rebound, Bitcoin is still down 64% from its November 2021 all-time high of $69,044.77.
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