The world of cryptocurrencies is experiencing its darkest hours this 2022. Now, in the middle of July and with a rampant heat wave, it seems that the most important currencies are managing to rebound slightly. Is recovery coming?
Bitcoin and Ethereum prices seem to have picked up a new momentum as the world’s most popular and valuable cryptocurrencies have seen substantial gains in value over the weekend.
As CoinDesk reports, Bitcoin was up 5%, opening Monday morning above the $22,000 mark for the first time since June’s bloody crash (34% overall) .
Ethereum, which is of particular interest to anyone thinking of upgrading their GPU for mining purposes, posted even bigger gains, posting a 20% rise in the same period: it is now trading at $1,479.
The cryptocurrency market crash in June came as the market fell further into the “extreme fear” indicator, hitting an all-time low of six points, according to the Crypto Fear & Greed Index.
However, after the recent increase in investor confidence over the last week, that same index is now at twenty points.
There are some likely catalysts for the price recovery this weekend. On Friday, Bank of America said it was seeing “ continued signs of selling pressure fading ” in crypto.
Another element to consider is Ethereum’s snail’s pace towards merger, the cryptocurrency’s move from the Proof of Work consensus mechanism to the more energy efficient Proof of Stake.
Expectations for the success of the merger in September , which have been bolstered by positive results from Ethereum testnets, have greatly contributed to the strong performance of the cryptocurrency.
The price increase has already caused a short-term market sell-off worth $230 million, as investors betting on Ethereum’s price decline lost their bets to those betting on higher market prices.
The bad news is that the strengthening of cryptocurrency prices will probably prompt miners to return to their activity.