The cryptocurrency sector is getting a boost today from Federal Reserve Chairman Jerome Powell’s comments yesterday. The market was shocked by Powell’s comments in the press release. He suggested that the direction of the Fed’s next move is likely to be lower. Markets had previously priced in the possibility of a rate hike, but at least for now, a rate hike appears to be unexpected.
A more accommodative monetary policy environment is likely in the future, with risk assets seeing strong gains across the curve in the past 24 hours. Of course, the farther out the risk curve investors go, the longer this move can last.About top cryptocurrencies Bitcoin (Cryptocurrency: BTC), Ethereum (Crypto: ETH)and dogecoin (Code:Doge)as of 4pm ET Thursday, representing increases of 3.8%, 2.2%, and 4%, respectively, in 24 hours.
Additionally, there are several token-specific factors at play in these three tokens where investors are likely pricing them today. Let’s take a closer look at what makes these closely monitored digital assets tick.
the rally continues
Bitcoin’s rise has been stagnant since reaching new highs during the most recent halving. Economic factors that could impact the world’s largest cryptocurrency had entrenched expectations that it could continue into the fall.
However, with interest rate hikes looking unrealistic, analysts are becoming increasingly bullish on Bitcoin in the short and medium term. Lower interest rates should depreciate the US dollar and increase the prices of various goods and goods that act as stores of value. For those who support this theory about Bitcoin, that’s great. In fact, yesterday’s press conference likely had the biggest impact on Bitcoin for this very reason.
Ethereum’s status as a commodity or some kind of store of value is also debatable. Ethereum, which ranks second in the sector by market capitalization, should benefit from trends similar to the inflows into cryptocurrencies that Bitcoin investors have benefited from. That’s because the market still expects the Securities and Exchange Commission to approve a Spot Ethereum ETF at some point (though some have suggested the SEC may still consider the asset a security). ), which should improve the supply and demand dynamics surrounding this token. As Ethereum moves to a proof-of-stake protocol and takes steps to combat token deflation, the market says the same forces that drove Bitcoin to all-time highs may be impacting Ethereum as well. A strong bullish outlook is building in the market. this year.
Dogecoin remains one of the most speculative crypto assets, meaning it is a top choice for traders and investors looking for short-term price movements in the market. For this reason alone, it’s no surprise that Dogecoin has made more notable moves than its larger peers. However, large liquidation data related to the previous decline of these three tokens in recent days could also influence today’s rally. Investors seemed to be looking for some reason to pile on the risk and put money into this sell-off. This recent macro catalyst appears to have provided the needed boost.
Will this rally continue?
Today’s movements must be understood in context. Bitcoin fell to a low of around $58,000 per token yesterday and is approaching the $60,000 level at the time of writing, but is still a long way from its all-time high of around $73,000 reached earlier this year. ing. Therefore, this token has gapped up very quickly in a short period of time, so it certainly has both upside and downside potential in the short term.
With other cryptocurrencies such as Ethereum and Dogecoin also trending to follow Bitcoin’s lead, this is probably the token investors should be paying close attention to right now. If some bullish catalysts materialize in the coming days, I think there is a good chance that Bitcoin will reach new highs again, with Ethereum and Dogecoin following suit. The only question is whether this particular macro catalyst will be amplified by additional news. I’m going to ignore this recent pop as it’s not really on my radar for now.
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chris mcdonald I have a position in Ethereum. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has Disclosure policy.
Why Bitcoin, Ethereum and Dogecoin soared today Originally published by The Motley Fool
