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(Bloomberg) -- Bitcoin extended a rally amid a brighter mood in global markets and as traders await US inflation data and monitor a seminal upgrade of the Ethereum blockchain.

The largest token rose as much as 3.9% on Monday and was trading a little above $22,000 as of 12:20 p.m. in New York. Smaller coins like Solana also pushed higher but Ether lagged.

Bitcoin jumped about 10% on Sept. 9, part of a broader embrace of beaten-down assets encouraged by a weaker dollar that hinted at a little less investor fear in a tough year. The greenback continued to slide at the start of the week. Meanwhile, US stocks also rose, with the S&P 500 adding 0.7% Monday. 

“The strong bounce in crypto last week happened with risk-on in global markets, so we should heavily discount it,” wrote Tagus Capital’s Ilan Solot in a note. “US CPI is due on Tuesday, so expect correlations to remain elevated if markets become volatile again.”

A blackout period for comments from Federal Reserve officials before the US interest-rate decision this month may be one of the factors helping Bitcoin, according to Tony Sycamore, senior market analyst for City Index in Sydney.

“The market knows that it’s got a break from this unrelenting hawkish Fedspeak for a couple of weeks and that the pace of central bank rate hikes is likely to slow,” he said.

The US inflation report due Tuesday is expected to show cooling headline price pressures. But a higher-than-anticipated print could harden expectations for restrictive monetary settings that are anathema for crypto prices. 

Any bumps in the upgrade later this week of Ethereum -- the most important crypto network commercially -- could also sow disquiet.

Rising borrowing costs alongside blowups at crypto lenders and hedge funds have saddled Bitcoin, Ether and the wider MVIS CryptoCompare Digital Assets 100 Index with losses of more than 50% in 2022.

Ether, the native token for the Ethereum network, is particularly in focus ahead of the latter’s transition to a more energy-efficient blockchain, a process known as the Merge. The crypto community is on alert for any snafus that buffet the many financial applications that rely on the network.

Ether futures volumes have been “consistently” surpassing spot volumes this year, according to CryptoCompare. In August, $997 million worth of futures were traded, compared with $689 million in spot markets. 

“We continue to be long Ether into the Merge, using dips as buying opportunities,” Sean Farrell, head of digital asset strategy at Fundstrat Global Advisors LLC, wrote in a note. He added that Ether didn’t succumb to a “sell-the-news” drop after three earlier Ethereum upgrades. 

The pattern of bets around options on Ether is weighted toward bullish calls, but the picture is more balanced around the Merge date, suggesting hedging in the lead up to the event, according to a note from Genesis Global Trading Inc.

(Adds new commentary and data from CryptoCompare.)