Bitcoin price briefly topped $25,000 for the first time since mid-June, benefiting from weaker-than-expected US inflation data and continued momentum from Ethereum's big upgrade.

Bitcoin rose 2.2% to $25,031 on Sunday, the highest since June 13. Ethereum shares rose 2% to $2,030.50, topping $2,000 for the first time since May 31, as investors were optimistic about the completion of Merge, a highly anticipated software upgrade to its blockchain.

"The next CPI data is due two days before the merger, when we expect the market to absorb a lot of the pre-event upside," said Sean Farrell, digital asset strategist at Fundstrat. "Long - and medium-term investors should use any dip as a buying opportunity."

As the Federal Reserve raised interest rates to combat stubbornly high inflation, cryptocurrency price continued to fall in the first half of the year, with bitcoin, Ether, and other tokens down more than 50%. Over the past week, following weaker-than-expected U.S. inflation data that could pave the way for a less aggressive tightening by the Fed, risky assets such as the Nasdaq 100 have rallied, helping fuel gains in cryptocurrencies, which have been closely correlated with stock market indicators for months.

"In addition to the increased volume of derivatives, we speculate that crypto native investors may start to take on more risk," Farrell said. He pointed to an increase in the balance of packaged bitcoins, which can be used as collateral in Ethereum's decentralized finance, with stablecoin speeds rising last week, suggesting more activity on the blockchain.

In a positive development for Ethereum, co-founder Vitalik Buterin said a few days ago after the final testing phase known as Goerli that the merger of the Ethereum blockchain could now happen around September 15. The merger represents a shift in how Ether is made and verified for transactions, from mining blocks using complex computational puzzles under a proof-of-work approach to proof of interest. In addition, some investors are preparing to benefit from a possible fork that would retain proof-of-work Ether, according to Genesis Global Trading.

Genesis Global Trading strategists Noelle Acheson and Willis Croft believe that "Ethereum is currently being driven by new fundamentals (post-merger tokenomics), speculative factors (ETH PoW fork), and overall macro sentiment." "While Ethereum price gains have been muted over the past few days, actual volatility has risen substantially since the lows at the start of the year, both reflecting growing investor interest and reminding the broader investment community that the crypto market story is never far away."

Market summary: Bitcoin rose for the third week in a row

Bitcoin (BTC) recovered to $24,000 after falling earlier. The largest cryptocurrency by market capitalization recently moved sideways and just passed that threshold. Bitcoin gained 3% last week, extending its recent momentum.

Ethereum (ETH) rose 0.6%, topping $1,900 for the second time this week. The price of ETH has risen 9% in the past seven days as investors eagerly await the Ethereum merger, which will shift the protocol from proof-of-work to a faster, more energy efficient proof-of-interest model.

So far this year, BTC and ETH are down 50% and 48%, respectively, and are closely linked. The correlation coefficient is between 1 and -1, with the former indicating a direct relationship and the latter indicating a complete inverse relationship.

The rebound was broad-based, with about 70 percent of stocks listed on the Nasdaq New York Stock Exchange closing higher. Crude oil fell 2.6 percent and natural gas fell 1.17 percent. Gold, a traditional haven asset, rose 0.53 percent.

Technology introduction

BTC's weekly RSI indicates price rebound momentum.

BTC's weekly chart shows Bitcoin's continued upward trend. After falling 42% between March 28 and June 27, prices rose 25% to more than $24,000, albeit with some twists.

The surge in trading volumes that began on June 13 means sellers are increasingly motivated to exit BTC positions. One question for investors is whether the selling pressure is based on Bitcoin's perceived value or driven by market-wide contagion, leading to forced selling.

Technically, the narrowing of the weekly candle chart and the decline in BTC's ATR (average true range) since June 13 imply a decline in volatility and sell conviction. The relative strength index (RSI), a widely recognized crypto market indicator that measures price momentum between "overbought" and "oversold," underscores investor aversion to digital assets but also opens the door for those willing to take the risk.