Ethereum, Solana, Polkadot lead the market rally.
Yesterday, the total market cap of cryptocurrencies rose slightly, after falling below $ 2 trillion for the first time since September.
The market has grown by more than 4% in the past 24 hours, led by Ethereum (up 8%), Solana (8%), Binance Coin and Polkadot (both up 11%). Other coins in the top 10 are also starting to gain traction, with Bitcoin (+ 4%), Cardano (+ 7%), XRP (+ 6%) and Terra (+ 10%).
However, according to FTX founder and CEO Sam Bankman-Fried, the market may not be able to regain momentum just yet:
“The market can grow today, but maybe not tomorrow.”
Ethereum established a 52-day consecutive uptrend before entering a downward spiral.
ETH / USDT. Source: TradingView
With ETH down 33% from the ATH of $ 4,878 set two months ago, there is still room for a return to this range in the near future.
But markets around the world, and particularly in the United States, are changing. The Federal Reserve is expected to hike rates three times this year to cool inflation. The end result, according to Kevin Kelly, Co-Founder of Delphi Digital, is a reduction in the funds available to borrow and spend. He said that BTC and crypto assets tend to do better when liquidity is plentiful and expanding; When liquidity gets tight, they get stuck.
That also contributed to the volatility in the US stock market. The S&P 500, which was up 26.9% last year, fell more than 1% in early 2022. The NASDAQ technology index is down more than 3% this year after gaining 21.4% in value in 2021. And the Dow Jones Industrial average remained unchanged in early 2022 after rising 18.7% in 2021. Like the cryptocurrencies, however, all three indices were up on the day, powered by technology stocks.
Why do we mention this since they are completely different markets? Stocks and cryptocurrencies are considered risky assets due to their volatility. In addition, they had similar price movement towards the end of last year.
According to a recent report from crypto asset data company Kaiko, the correlation between Bitcoin and US stock indices has reached its highest level since July 2020. The correlation is now at its highest level since July 2020. between BTC and gold is lower than zero, meaning these two markets tend to move in opposite directions.
Ethereum, on the other hand, has a correlation coefficient of 0.72 with Bitcoin last year, according to Cryptowatch, where 1 stands for two markets that are moving in the same direction.
The cryptocurrency in general and the Bitcoin market in particular are on the upswing today. However, users need to keep an eye on it to see if this rally can continue tomorrow.
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