Big buying activity boosting Bitcoin, Cardano, and Polkadot today

These mega-cap cryptos are seeing the benefits of an incredible market-driven sentiment shift.

| More on:
a close up of a hand is outstretched amid graphic images of currency and cyprtocurrency symbols seemingly floating around a sphere of light representing perhaps the globe.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

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.

More on International Stock News

A man looking at his laptop and thinking.
International Stock News

Why Alphabet stock was sliding today

Let's take a look.

Read more »

A man looking at his laptop and thinking.
International Stock News

Nvidia's stock was down despite its amazing earnings. Here's what history says is coming next

Although it might seem to defy logic, it's not an uncommon phenomenon.

Read more »

A woman holds a soldering tool as she sits in front of a computer screen while working on the manufacturing of technology equipment in a laboratory environment.
International Stock News

Nvidia share price slips despite 94% revenue growth

Q3 earnings beat expectations, but what about guidance?

Read more »

high, climbing, record high
International Stock News

Could the S&P 500 Index hit 6,500 by the end of 2025?

Could the index climb higher?

Read more »

a small child holds his chin with his head on the side in a serious thinking pose against a background of graphic question marks and a yellow lightbulb.
International Stock News

Is it too late to buy Nvidia shares?

Is Nvidia stock a buy ahead of its third-quarter earnings report tomorrow?

Read more »

a group of people stand examining a large glowing cystral ball held in the hands of one of the group members while the others regard it with various expressions of wonder, curiousity and scepticism.
International Stock News

Here's what to expect from Nvidia on November 20

Can Nvidia score another win?

Read more »

Two people lazing in deck chairs on a beautiful sandy beach through their hands up in the air.
International Stock News

2 no-brainer Warren Buffett stocks to buy right now

While replicating Buffett's success isn't possible, there are a handful of his investments that are no-brainer buys.

Read more »

A man with a beard and wearing dark sunglasses and a beanie head covering raises a fist in happy celebration as he sits at is computer in a home environment.
International Stock News

3 reasons to buy Nvidia stock before November 20

This week marks a big moment for tech investors as perhaps the most anticipated earnings of the year will be…

Read more »