The cryptocurrency market perked up on Wednesday morning following news that inflation cooled off last month.
With declining gas prices and airfares, the Consumer Price Index (CPI) rose 0%, remaining flat, from June to July, but jumped 8.5% over the past year. Though that’s still high, it’s better than expected, and provides a bit of relief for investors.
Bitcoin (BTC) jumped 3% after the report, hitting a 24-hour high of $24,205 at 9:30 a.m. EST. The largest cryptocurrency by market value has since leveled, currently trading at around $24,000.
Meanwhile, Ethereum’s currency, Ether (ETH), leapt 6% on the news and is up 9.6% over the last day. It is currently trading around $1,845.
“The saying is that optimism in a bear market is more precious than diamonds, so we are seeing hope here,” Youwei Yang, director of financial analytics at StoneX, tells Fortune.
In addition to slowed inflation, excitement surrounding the Ethereum “merge,” a highly anticipated upgrade promising to improve the network’s efficiency, is also likely contributing to Ether’s bullish run, as later today, Ethereum is likely to run through its final test for the merge.
“The September [Ethereum] merge bet still goes on as the open interest of derivatives for ETH is higher than for BTC, for the first time ever,” Yang said. “This morning’s CPI has relieved some macro fear and continue to support the summer rally of crypto led by ‘ETHusiasms.'”
Altcoins, or cryptocurrencies aside from Bitcoin, are also in the green. Cardano’s ADA, Solana’s SOL, Polkadot’s DOT, and Avalanche’s AVAX are up 5%, 4%, 9% and 8% respectively in the last 24 hours.
For this “bullish scenario” to continue, Ryan Shea, crypto economist at trading platform Trakx, tells Fortune, “the Federal Reserve requires confirmation that inflation has peaked and is rapidly falling back towards its 2% inflation target.”
Sign up for the Fortune Features email list so you don’t miss our biggest features, exclusive interviews, and investigations.