Bitcoin crossed the $25,000 level late Saturday night for the first time since June 13, By Sunday morning it had lost steam and fell 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 of the time.
Bitcoin is up only 5.85% in the past week, while No. 2 Ethereum is up 16% in that time in anticipation of the network’s upcoming merge into a proof-of-stake model.
Bitcoin’s bump may be partly thanks to cooling inflation: Key economic indicators remained unchanged last month as Federal Reserve interest rate hikes countered 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 potentially impending global recession.
The Fed has in turn raised interest rates, and this has created a risk-averse environment in which investors have left crypto and volatile tech stocks to keep on the greenback.
Bitcoin was previously considered an inflation hedge, but its label as an anti-inflationary “digital gold” has been tested this year: instead it is closely tied to tech stocks.
Despite its recent signs of a rally, bitcoin is still down 64% from its November 2021 all-time high of $69,044.77.