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

Four investors stand in a line holding cash fanned in their hands with thoughtful looks on their faces.
Economy

Up 20% this year. Does the S&P 500 Index have more in the tank for 2024?

Will US stocks hold up after the election?

Read more »

two young boys dressed in business suits and wearing spectacles look at each other in rapture with wide open mouths and holding large fans of banknotes with other banknotes, coins and a piggybank on the table in front of them and a bag of cash at the side.
International Stock News

2 magnificent S&P 500 dividend stocks down 27% to 51% to buy and hold forever

These stocks hold potential to act as growth and income plays.

Read more »

A young female investor with brown curly hair and wearing a yellow top and glasses sits at her desk using her calculator to work out how much her ASX dividend shares will pay this year
International Stock News

One Wall Street analyst thinks this emerging Artificial Intelligence stock could rise 60% in the next year

SoundHound AI is on the doorstep of a big year.

Read more »

man looks up at apple on his head
International Stock News

Why did Warren Buffett sell more Apple shares?

Does Buffett know something we don't?

Read more »

A male party goer sits wearing a party hat and with a party blower in his mouth amid a bunch of balloons with a sad, serious look on his face as though the party is over or a celebration has fallen flat.
International Stock News

What snapped the S&P 500 winning streak last night?

The S&P 500 almost made October a winner, but fell at the final hurdle.

Read more »

Man going down a red arrow, symbolising a sliding share price.
International Stock News

Why Nvidia stock is sinking today

Investors were spooked by economic data and the ambitions of a deep-pocketed rival.

Read more »

Rede arrow on a stock market chart going down.
International Stock News

Why Microsoft stock is sinking today

Microsoft just beat quarterly earnings estimates. So why is the stock falling?

Read more »

US economy and sharemarket with piggy bank
Share Market News

Here's why Goldman Sachs sees a decade of lower returns ahead for US shares

Aussie investors have placed a lot of faith in US shares this year.

Read more »