Bitcoin broke above the $30,000 barrier for the first time in ten months on Tuesday, adding to its steady gains as investors increased their wagers that the US Federal Reserve would soon halt its relentless monetary tightening drive.
Bitcoin reached a high of $30,438 in Asian trade and was last trading up 1.96% at $30,233. It is up about 6% since the beginning of the month, after increasing 23% in March.
Investors are anticipating U.S. inflation data on Wednesday in order to analyse the Fed’s next actions after the banking sector’s instability in March, which heightened hopes that the central bank will slow off on rate rises to relieve stress on the industry.
“The recent surge in bitcoin’s price is like a breath of fresh air after a long, cold crypto winter,” said Tim Frost, CEO of crypto yield platform Yield App.
“This renewed optimism could be attributed to an anticipated shift in the U.S. Federal Reserve’s monetary policy, which is expected to create a more stable, and hopefully predictable, environment.”
However, Friday’s carefully anticipated U.S. nonfarm payrolls (NFP) data showed businesses maintained a solid pace of hiring in March, indicating a still-resilient economy.
“There were some expectations of a potential miss on NFP on Friday, and that’s bolstered confidence coming into” the release of US consumer price index data, according to Joseph Edwards, financial advisor at Enigma Securities.
According to digital asset management company CoinShares, crypto investment products garnered $57 million in inflows last week, although on a low volume basis, with the majority of the money concentrated on bitcoin. According to the research, this takes digital asset flows back into positive territory for the year.
“The market has done a great job at culling all leveraged participants in the past 18 months,” said Matthew Dibb, chief investment officer of Astronaut Capital, a Singapore-based crypto asset management firm.
“If (bitcoin) can survive the week over $30,000, we are going higher.”
Ether, the second-most valuable cryptocurrency, was trading around last week’s almost eight-month high of $1,942.50. It last rose 1.56% to $1,915.56.
Crypto investors are looking forward to a huge update to the Ethereum network on Wednesday, which will give them access to more than $33 billion in ether money.
The Shapella software patch will allow market participants to redeem their “staked ether—currency they have placed and locked up on the network in exchange for interest over the previous three years.
While Shapella is unlikely to directly generate ether sale pressure, volatility may be heightened around the event, according to Bank of America analyst Alkesh Shah.