News
Why Bitcoin, Ethereum and Dogecoin Rise Today
Risky assets across the board received a boost from the Fed, with these three tokens seeing better upside than the market.
The cryptocurrency sector is getting a nice boost today from Federal Reserve Chairman Jerome Powell’s comments yesterday. The market received a jolt from Powell’s comment in a press release; he suggested that the direction of the Fed’s next move will most likely be lower. The market had already previously priced in the possibility of an interest rate hike, which appears to be out of the question, at least for now.
With the likely more accommodative monetary policy environment ahead, risky assets across the curve have seen strong momentum over the past 24 hours. Of course, the further investors move away from the risk curve, the more protracted this move can be. For the best cryptocurrencies Bitcoin (Bitcoin 3.87%), Ethereum (ET 3.51%) e Dogemoneta (DOGE 6.27%), that means a 24-hour move of 3.8%, 2.2%, and 4%, respectively, as of 4 PM ET on Thursday.
Additionally, there are some token-specific factors at play with these three tokens that investors appear to be evaluating today. Let’s dive into what drives these closely monitored digital assets.
The demonstration continues
Since reaching a new all-time high right around the time of its latest halving, Bitcoin’s rally has faltered. Expectations for a potential continuation of this decline had gathered steam due to economic factors that could affect the world’s largest cryptocurrency.
But with interest rate hikes seemingly off the table, analysts have become increasingly bullish on Bitcoin in the short to medium term. Lower interest rates are expected to push the US dollar lower, inflating the price of various commodities and assets that serve as stores of value. For those who believe this thesis for Bitcoin, that’s a great thing. In fact, yesterday’s press conference probably had the biggest impact on Bitcoin for this very reason.
Ethereum’s status as a commodity or some sort of store of value is also questionable. Ranking second in terms of market capitalization in this sector, Ethereum is expected to benefit from a similar trend of capital inflow into cryptocurrencies that Bitcoin investors have benefited from. This is because the market still expects the Securities and Exchange Commission to approve Ethereum spot ETFs sooner rather than later (although some suggest it is possible the SEC could still consider this asset a security), which should improve demand dynamics and offer around this token. As Ethereum has moved to a proof-of-stake protocol and taken some deflationary measures for its token, a strong bull case is developing in the market that the same factors that sent Bitcoin on its run to record highs may be in game for Ethereum this year.
Dogecoin remains among the most speculative cryptocurrencies around, meaning it is the best choice for traders and investors looking to take advantage of short-term price swings in the market. It’s no surprise that Dogecoin has seen more pronounced movement than its larger competitors, for this reason alone. However, large liquidation data related to the previous decline of these three tokens in recent days could also play a role in today’s rally. It appears that investors have been looking for any reason to take on risk and invest capital to take advantage of this decline. This recent macro catalyst appears to have provided the necessary push.
Is this rally destined to continue?
Today’s move needs to be put into context. Bitcoin fell to a low of around $58,000 per token yesterday, and while it is moving towards the $60,000 mark at the time of writing, it is still far from its all-time high of around $73,000 reached earlier this month. year. So, there is definitely both upside and downside potential in the short term, as this token has opened up quite quickly in a short time.
Other cryptocurrencies like Ethereum and Dogecoin tend to follow Bitcoin’s lead, so I would say this is the token most investors should focus on right now. I am of the opinion that if a series of bullish catalysts materialize in the coming days, it is quite possible that Bitcoin could make another run to a new high, and Ethereum and Dogecoin could follow. The question is only whether this specific macrocatalyst can be amplified by some additional news. There’s not much on my radar at the moment, so I’ll leave this recent pop alone.