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

The crypto market did a hard-180 today, in the right direction.

| More on:
Person pointing at an increasing blue graph which represents a rising share price.

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 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 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 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.

More on International Stock News

a water tap is turned on and showering out banknotes into the open hand of a woman below it.
International Stock News

Companies with high free cash flow margins and high free cash flow yields massively outperform the market over time

What matters for long-term investing success.

Read more »

Woman on her laptop thinking to herself.
International Stock News

Is it time to load up on beaten-down growth stocks (like Tesla)?

Here's a look at some issues facing both the markets and one electric-vehicle maker in 2022.

Read more »

A woman in business attire sits at a desk in an office situation holding a red apple in her hand and smiling.
International Stock News

Why Apple stock climbed on Wednesday

On a mixed day for Wall Street, channel checks reveal some positive developments for Apple investors.

Read more »

amazon delivery
International Stock News

Why Amazon stock rose while the market slept on Wednesday

Tech stocks might just be waking from their summer slumber, and an analyst pegs this one as a top pick.

Read more »

woman watching netflix on her phone
International Stock News

4 potential winners from Netflix’s advertising plans

Netflix needs a big partner or two for its forthcoming ad-supported tier.

Read more »

tesla model 3
International Stock News

3 reasons Tesla could soar after its stock split

The electric vehicle manufacturer is firing on all cylinders (not literally, of course).

Read more »

A disappointed man slumps in his chair and holds his head while playing an online game
International Stock News

GameStop is in trouble — and it’s not because of Congress

The threat of a slow-moving Congressional committee is not the stock's most pressing worry.

Read more »

A man stands on a ladder in a stripey one-piece swimsuit, ready to plunge into the freezing water through a hole in the ice.
International Stock News

Why Meta Platforms plunged on Tuesday

On a bad day for tech stocks, Meta did even worse on the back of a pair of negative headlines.

Read more »