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In August, investors returned to cautious purchases of cryptocurrencies, having bought out the market decline at the beginning of the month and returned capitalization close to the highs of July. The demand for digital currencies still largely depends on the general state of the global economy and fundamental news, but the implementation of plans to switch the Ethereum network to the PoS algorithm plays a big role right now.
Analysts believe that next week’s trends will be determined by US inflation data, the fall in consumer price growth may force the Fed to “slow down” the process of rate growth.
The tightening of monetary policy was the reason for the beginning of the fall of the cryptocurrency market in November last year. High inflation in the United States has become a global problem that has deprived the flow of liquidity and investment in digital assets and stocks.
The increase in Fed rates led to a technical recession – a double drop in US GDP in the 1st and 2nd quarters of the year. The financial regulator is now forced to ease the pace of monetary tightening in order to stimulate the growth of the gross domestic product, if inflation allows.
Investors will pump the cryptocurrency market with annual consumer price growth below 9%. However, new records of this indicator will lead to the opposite effect, bringing down the rates of Bitcoin and altcoins.
The positive trend may continue on Thursday, after the release of news about the successful transfer to the PoS algorithm of the last Ethereum testnet. The appearance of proof validators in Goerli will start the countdown for the merger of PoW and PoS blockchains on the mainnet. It is scheduled for the end of September and confirmation of the dates will lead to new local Ethereum highs.
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