Ethereum
Why Bitcoin, Ethereum and Dogecoin rose today
The cryptocurrency sector is getting a nice boost today thanks to yesterday’s comment from Federal Reserve Chairman Jerome Powell. The market was shaken by Powell’s comment in a press release; he suggested that the direction of the Fed’s next move would most likely be weaker. The market had previously priced in a possible interest rate hike, which seems off the table, at least for now.
With the likely prospect of a more accommodative monetary policy environment, risk assets across the curve have seen a sharp rise over the past 24 hours. Of course, the further investors move away from the risk curve, the longer this evolution can persist. For the best cryptos Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), and Dogecoin (CRYPTO:DOGE), this means a 24-hour change of 3.8%, 2.2% and 4%, respectively, as of 4 p.m. ET on Thursday.
Additionally, some token-specific factors come into play with these three tokens that investors seem to be pricing in today. Let’s take a look at what’s moving these closely watched digital assets.
The gathering continues
Since hitting a new all-time high at the time of its last halving, Bitcoin’s rally has faltered. Expectations of a possible continuation of this fall had been established 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 depress the U.S. dollar, inflating the price of various commodities and goods that serve as a store of value. For those who subscribe to this thesis on Bitcoin, this is a good thing. Indeed, it is precisely for this reason that yesterday’s press conference probably had the greatest impact on Bitcoin.
Ethereum’s status as a commodity or store of value is also questionable. Second in terms of market capitalization in this sector, Ethereum is expected to benefit from a similar trend of capital inflows into cryptocurrencies that Bitcoin investors have benefited from. Indeed, the market still expects the Securities and Exchange Commission to approve Ethereum spot ETFs at some point (although some suggest it’s possible the SEC could still consider this asset a security), which should improve the supply and demand dynamics around this token. As Ethereum has moved to a proof-of-stake protocol and taken deflationary steps for its token, there is a strong bullish case in the market that the same factors that caused Bitcoin to reach record highs could be at play for Ethereum. This year.
The story continues
Dogecoin remains one of the most speculative crypto assets, meaning it is a top choice for traders and investors looking to profit from short-term price fluctuations in the market. It’s no surprise that Dogecoin has seen a more pronounced move than its larger peers, for this reason alone. However, significant liquidation data related to an earlier decline in these three tokens in recent days could also play a role in today’s rally. Investors seem to have been looking for any reason to take risks and invest their capital in this decline. This recent macroeconomic catalyst appears to have provided the necessary impetus.
Is this rally about to continue?
Today’s decision must be placed in context. Bitcoin fell to a low of around $58,000 per token yesterday, and although it is closing in on the $60,000 mark at the time of writing, it is still far from its all-time high of around $73,000 hit earlier this year. So there is definitely upside and downside potential in the short term as this token has risen quite quickly in a short period of time.
Other cryptocurrencies like Ethereum and Dogecoin tend to follow Bitcoin’s lead, so I would say this is the token most investors should be focusing on right now. I am of the opinion that if a number of bullish catalysts materialize in the coming days, it is entirely possible that Bitcoin could reach a new high, and that Ethereum and Dogecoin could follow. It’s simply a question of whether this specific macroeconomic catalyst can be amplified by additional news. Right now there’s not much on my radar, so I’ll leave this recent pop aside.
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Chris MacDonald has positions in Ethereum. The Motley Fool posts and recommends Bitcoin and Ethereum. The Mad Motley has a disclosure policy.
Why Bitcoin, Ethereum and Dogecoin rose today was originally published by The Motley Fool