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Bitcoin hits 3-month high above $45,000

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Ljubljana, Slovenia - may 14 Bitcoin and alt coins cryptocurrency close up shoot
Cryptocurrencies pared back some of their gains on Monday morning in London. Photo: Getty

Bitcoin gathered steam on Monday afternoon in London, heading above the $45,000 mark for the first time since mid-May. 

Both bitcoin (BTC-USD) and ethereum (ETH-USD) had hit their highest levels since mid-May over the weekend, as sentiment improved following a major ethereum upgrade. 

Bitcoin had headed to around $45,328 (£32,722.51) on Sunday, retreating 2.8% on Monday morning to $43,638.02. By the end of the day in London it had rebounded 4.5%, back up to $45,970

The token is "eyeing a major breakout above $40,000, bolstered by the proposed crypto amendment in the US infrastructure bill," said Joe DiPasquale, CEO at BitBull Capital. 

Ethereum also pulled back from highs of $3,191, trading 6.4% lower to hit $2,950.05 in early trade in London. By the end of the day it had reversed losses, to trade 3.9% higher at $3,161. 

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Developers successfully completed a "hard fork" on Thursday, essentially changing the underlying code that ethereum relies on to run. The so-called "London hard fork" changes the way transaction fees are calculated on the network and is designed to reduce the pace of growth in the coins.

Bitcoin rallied on Monday past the $45,000 mark, but was still below the dizzying heights of April. Chart: Yahoo Finance UK
Bitcoin rallied on Monday past the $45,000 mark, but was still below the dizzying heights of April. Chart: Yahoo Finance UK

Paolo Ardoino, chief technology officer at Bitfinex, said the changes would help attract more DeFi — decentralised finance — projects to operate on ethereum's network.

"Traders need to be slightly cautious as the RSI, for both Ethereum and Bitcoin, is in the overbought territory," said Naeem Aslam, chief market analyst at AvaTrade. 

"This means that we could see some retracement for the top two crypto assets. But, at the same time, that could be a great opportunity to bag some bargains as it is clear now that both Ethereum and Bitcoin have formed a higher low."

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Crypto tokens have pulled back from record highs in recent months as China pushed on with a crackdown on mining and questions about how environmentally friendly the industry is continue. 

In April Bitcoin had been trading well past the $63,000 mark, while ethereum moved past $4,100. 

Watch: What are the risks of investing in cryptocurrencies?

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