Bitcoin and Ethereum prices appear to be bouncing back but analysts urge caution

After enduring a tough few months, Bitcoin and Ether prices have seen an upturn over the past few days. Bitcoin price recorded a 7% gain, taking its price to a daily high of $21,800 after hovering around the $20,400 mark for most of July 7.

Ethereum price has also steadily advanced and has now gained over 19% on the week, taking its price to $1,241. Ethereum’s price surge is due to the latest success in its quest to move from proof-of-work (PoW) to proof-of-stake (PoS), as its developers cleared another network hurdle. testing and now looking like it could be in action later this year.

Earlier this week, ethereum programmers announced that the second of three public testnets used for the merger has been successfully deployed. This last step, called Sepolia, paves the way for the final deployment on the Goerli test network. Once all testnet programming has been validated and there are no more issues, the PoS improvements will be rolled out to the Ethereum mainnet later this year.

According to Jamie Cox, Managing Partner of Harris Financial Group, the surge in bitcoin and ether prices is also partly linked to the increase in unemployment claims in the United States, which could indicate that “wage pressure may have peaked“.

Jamie Cox added that if this trend continues, it could lead to financial conditions “tight enough to allow the Fed to reduce the magnitude of rate hikes.

Other analysts are urging investors to tread carefully, however, as the latest price break could be a false alarm that could lead investors into a macro bearish trend in the near future.

According to an analyst, the latest spike in volume recorded on the respective networks that sent Bitcoin and Ether prices skyrocketing confirms breakouts and false breakouts. He added that FTX received $22,000BTC from Celsius at the start of July 7.

Additional reports from the analyst said this is the latest in a series of fakeouts that will fool many traders into thinking the bottom has been reached when in fact the trend is still down. “Volume declining within a range is consolidation for trend continuation. Not to mention the thousands of influxes on the exchanges before each summit“, did he declare.

crypto analyst, Michael van de Poppe also pointed to the possibility of a large amount of liquidity above the 200-week MA. “If bitcoin breaks through this level, I guess we will probably have a $2-5K run up in a few days, down to $28-30K. And then the feeling will change too“, did he declare.

Bitcoin fell below its 200-week MA for the fourth time in its history, prompting speculation about whether the digital coin could break back above the line and what to expect next.

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