Ethereum prices rose past $1,900 today, nearing 3-month highs. After yesterday’s release of the CPI (Consumer Price Index) data for July, which revealed no change last month, cryptocurrencies like Bitcoin and Ethereum saw significant upside this Thursday. Combined with the upcoming network merge for Ethereum, ETHUSD continues to outperform Bitcoin daily, nearing the 50% market cap of BTCUSD.
Ethereum’s Market Cap Approached 50% of Bitcoin
With this week’s excellent performance for Ethereum, despite Coinbase’s Q2 earnings report registering a $1.1 billion loss, ETH’s market cap is approaching half of Bitcoin’s. Where it stands now, Ethereum is valued at $234 billion, compared to Bitcoin’s $472 billion. We could see Ethereum overtake half of Bitcoin’s market capitalization in the next several days if the current performance continues.
Once Ethereum overtakes half of Bitcoin’s market cap, that would be the first step to additional gains. ETH could start building its next significant rally past 75% of BTC’s value.
Ethereum has been amplifying Bitcoin’s gains and mitigating Bitcoin’s losses for several weeks, contributing to higher prices and faster recovery. While Bitcoin just now peaked past its 1-month high, Ethereum is looking to surpass its 3-month high of $2k in the next several days.
Favorable CPI Data Causing Significant Upside
The Consumer Price Index released by the U.S. Bureau of Labor Statistics measures the average change over time in the prices consumers pay for goods and services. It provides a gauge for analysts on how the economy is progressing and is an essential indicator of the rise or fall of inflation.
When CPI numbers increase and signal rising prices and inflation, it negatively affects markets. On the other hand, CPI data showing a decrease in the prices of goods and services signals a recovering economy and positively affects markets.
Yesterday’s CPI data showed that prices remained relatively unchanged in July, with gas and energy prices even registering a fall of 7% and 4%, respectively.
According to the report:
“The gasoline index fell 7.7 percent in July and offset increases in the food and shelter indexes, resulting in the all items index being unchanged over the month. The energy index fell 4.6 percent
over the month as the indexes for gasoline and natural gas declined, but the index for electricity increased. The food index continued to rise, increasing 1.1 percent over the month as the food at home index rose 1.3 percent.”
While prices for food and shelter did increase, they were offset by the decrease in gas and energy prices. This is the first time CPI data showed a net-zero change this year, creating hope for a potential economic recovery.
It’s still too early to tell whether the bear market is over. However, it’s clear that the Fed’s aggressive rate hikes over the past several months have helped the economy to recover.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any stocks.