Big buying activity boosting Bitcoin, Cardano, and Polkadot today

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

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

What happened

The sentiment shift we’ve seen play out among major cryptocurrencies appears to be continuing this week. Today, Bitcoin (CRYPTO: BTC), Cardano (CRYPTO: ADA), and Polkadot (CRYPTO: DOT) each surged higher to start the week, building on gains these tokens have seen since bottoming in mid-June. As of 2 p.m. ET, Bitcoin, Cardano, and Polkadot appreciated 3.5%, 4.9%, and 6.8%, respectively, over the past 24 hours.

Bitcoin actually rallied more aggressively this morning, breaching the $25,000 mark for the first time since June. Broader market sentiment, which has shifted in a bullish direction as investors focus on catalysts such as Ethereum‘s upcoming The Merge over headwinds related to insolvencies and structural issues in this space, appears to be the key factor Bitcoin investors care about right now.

Cardano has seen continued interest, as this network approaches its own key update: its Vasil hard fork. Founder Charles Hoskinson has reiterated that this upgrade is unlikely to be delayed any further, noting no key issues with testing thus far. 

That said, Polkadot’s rise today is rather intriguing to consider, as a Polkadot-backed stablecoin, acala dollar (aUSD), was recently hacked, losing 99% of its value. As with many ecosystem-driven crypto projects, it appears investors are paying less attention to these headlines, choosing to focus on Polkadot’s ties to Ethereum in this market rally.

So what

It’s truly incredible to see the degree to which market sentiment has shifted in the crypto sector. Tokens such as Polkadot that encounter a hack, or tokens like Cardano that delay their upgrades, aren’t being put in the penalty box by investors. It’s risk-on again, with speculators, traders, and investors alike all jumping aboard. 

The multiweek nature of this crypto market rally has some investors thinking the bottom may be in. Whether this buying activity can hold up in the face of upcoming rate hikes and the potential for more macro headwinds remains unclear. However, this is the most exuberant the market has appeared since last year, to be sure.

Now what

We’re in an interesting period of time, in which most investors have become self-proclaimed economists. As the Federal Reserve has accelerated its rate hiking schedule, various risky asset classes (such as crypto) have been hit hard during the first half of this year. However, given a lag between the Fed’s last rate decision (July 27) and its next decision (Sept. 21), there’s a time frame in which investors can ignore the rate hike talk and buy the dip.

That said, through the end of the year, more headwinds could materialize if the Fed doesn’t stop hiking rates, like most in the market expect. This could be a Goldilocks period, which provides a significant bear market rally.

Alternatively, this rally could continue if expectations are proven correct. And should the major upgrades in store for Ethereum and Cardano prove fruitful, perhaps this rally is only the beginning. Time will tell.

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

The post Big buying activity boosting Bitcoin, Cardano, and Polkadot today 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. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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