Bitcoin, Ethereum, and Cardano are turning it around today. Here’s why

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Person pointing at an increasing blue graph which represents a rising share price.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Today’s been a rather rocky one in the world of cryptocurrencies. Despite a significant sell-off yesterday in most top tokens, there’s been a solid rebound across all 10 of the largest tokens by market capitalization this afternoon.

As of 4:20 p.m. ET, Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), and Cardano (CRYPTO: ADA) erased all of this morning’s losses and then some, increasing 2.9%, 1.9%, and 1%, respectively, over the past 24 hours. 

There were a number of catalysts responsible for this move. 

Perhaps the most important catalyst for all three of these top-10 tokens is being provided via a bullish macro environment. Bitcoin and its large-cap peers have surged in this afternoon’s session, following their equity counterparts higher as risk-on sentiment builds in today’s market. Generally strong earnings from key companies reporting this week have provided the view that the economic outlook may have grown too bearish in April. Being among the riskiest assets on the market, cryptocurrencies are following tech stocks and other risk assets higher today.

Positive derivatives action, an airdrop and DAO announcement from an Ethereum Layer-2 network, and an upgrade to Cardano’s block size (by 10%) also helped these tokens surge higher this afternoon.

So what

There’s certainly a lot going on with each of these projects at a token-specific level. The ecosystems behind Bitcoin, Ethereum, and Cardano are each massive. And as these ecosystems grow and evolve, investors can find new and exciting reasons to invest in these long-term growth assets.

That said, this macro environment appears to be driving most of the market-related swings in the crypto world. While today’s late price action has provided a reprieve for investors, it’s unclear if this rally can be maintained. Accordingly, investors are likely to remain on edge for some time, until signs of a true bull market materialize again.

Now what

Cryptocurrencies have been a great place to stay invested over the past decade. That said, these assets have been historically much more volatile than any other asset since inception. Accordingly, investors looking to play the long game in this sector may want to take some time away from reading daily charts and following the price action on these tokens too closely. Mental health is important.

Today’s price action is indicative of the kinds of dramatic moves to the upside and downside that can happen within the span of a given trading day. While these tokens sank deep into the red this morning, investors did appear ready to buy the dip in the afternoon session, giving hope to investors worried about a lack of buyers in this difficult market.

Moving forward, I’m expecting much more of the same, in terms of volatility. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Bitcoin, Ethereum, and Cardano are turning it around today. Here’s why appeared first on The Motley Fool Australia.

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Chris MacDonald has positions in Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Ethereum. The Motley Fool Australia owns and has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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