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Why Ethereum, Bitcoin, and Cardano Are Rocketing Higher Today

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what happened

stock movements today Cryptocurrency Markets are giving investors who have been beaten for most of 2022 a boom. As of 3:00 PM ET on Tuesday, ethereum (ethereum 9.62%), Bitcoin (Bitcoin 4.38%)When Cardano (ADA 9.51%) Over the last 24 hours, they surged 11.7%, 4.9%, and 13.3%, respectively. The moves come amid hopes that the Federal Reserve could slow the pace of rate hikes sooner than expected and stronger-than-expected large-cap earnings reports this week. .

One of the main drivers of expectations that the Fed may delay rate hikes stems from new data released today that updated the August figures for the S&P CoreLogic Case-Shiller Home Price Index. House prices rose 13% year-on-year in August, but this rate of increase was down significantly from his 15.6% in July. Therefore, this was the sharpest slowdown since the Case-Shiller index was launched.

Data from the Case-Shiller 20-City Index also gives a clearer picture of where major metropolitan area prices are headed. The index showed a month-on-month decline of 1.6% in the top 20 major US markets.

Other positive earnings data from global companies such as coca cola When GM Expectations increased this week that the economy could achieve a potential soft landing and interest rates could fall in the medium term.

So what

The incredible rise of major cryptocurrencies today shows the highly correlated, higher beta moves the crypto sector has been making this year. In general, most of the same macro factors that have driven stocks down most of the year have had a similarly outsized impact on digital assets. Therefore, as a riskier proxy for stocks, digital currencies often make big gains on stock market rally days.

If interest rates begin to fall later this year, some analysts believe the rally could accelerate into 2023. housing market.

So

Long-term investors looking to bottom out have failed to do so so far this year. Most of the pullback has been met with lower lows. This suggests that we have not seen a real capitulation of riskier assets today. In some ways, today’s surge in major cryptocurrencies may indicate that speculative capital has yet to be fully washed away. So perhaps today’s rally is a short-term bearish signal for the market.

However, it is quite possible that the market is correct in assessing that interest rates are unlikely to rise any further. The economy is definitely slowing in certain core areas such as housing. And given the lag in the data, which has caused the Fed to be slow to react to the initial spike in inflation, it’s possible that prices have fallen more than the data suggests.

In my opinion, it is probably too early to say the selling pressure on cryptocurrencies in general is over. However, if the market becomes bullish again, these three high-quality tokens could be the best performers. Therefore, now may be an interesting time to consider easing positions as the market is looking for a bottom.

Chris McDonald I have a position in Ethereum. The Motley Fool has positions in and recommends Bitcoin, Cardano, and Ethereum. The Motley Fool Disclosure policy.

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