Ethereum soared 12% today following a successful test ahead of the upcoming 'merge', and after CPI data in the US showed inflation had slowed in July.
Following the healthier inflation data from the US and the successful Ethereum proof of stake test, Ethereum's native cryptocurrency ether hit a high of $1905.
On Wednesday, the Ethereum network (ETH-USD) ran its last test before the major upgrade, which is expected to take place in mid-September.
An Ethereum test network, called Goerli, named after the train station in Berlin, tested the proof of work method that will run across the entire network after the coming 'merge', the trial was a success.
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Investors' eyes are now watching the steady climb in the value of ether ahead of September's 'merge' to a proof of stake consensus mechanism.
However, challenges have arisen to obstruct a clean 'merge' to proof of stake, with some Ethereum proof of work miners wanting to maintain the legacy way of validating transactions and create their own native asset, which could be listed on exchanges as ETHW.
The upgrade will see the end of Ethereum as a high-energy intensive proof of work (PoW) blockchain, and switch to a more environmentally friendly proof of stake (PoS) mode for validating transactions.
The price of ether fell to $877 in July and has nearly doubled since then to $1,882 as of the time of writing.
The world's second-largest cryptocurrency by market cap is up 12% in the last 24 hours and 16.2% in the last week.
Bitcoin (USD-BTC) has also gained today, up 6.4% in 24 hours to stand at $24,538, up 7.2% in the last week.
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The Consumer Price Index (CPI) inflation data for the US came out on Wednesday and showed that inflation peaked in June and then slowed in July.
In the 12 months through July, the Consumer Price Index (CPI) in the US increased by a weaker-than-expected 8.5%, following a 9.1% rise in June.
The price of consumer goods did not rise in July due to a sharp drop in the cost of gasoline.
This was the first sign of relief after inflation has climbed over the past two years.
Bitcoin and other blue chip cryptocurrencies again revealed their trend of correlating with tech stocks, and as Wall Street equities rallied so did blue chip cryptocurrencies.
The combined crypto market cap is up 7.1% in the last 24 hours to $1.21 Trillion.
Investors are eyeing the decelerating US inflation rate in the anticipation it prompts a less hawkish Federal Reserve.
The Fed has been issuing consecutively hawkish interest rate hikes, but the latest inflation figures may see interest rates rising at a slower pace than previously expected.
However, the Fed has indicated that several months of a decline in CPI growth would be needed before it lets up on the increasingly aggressive monetary policy tightening measures.
The level of inflation in the US is currently running at a four-decade high.
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