Bitcoin’s Price Rises As Cryptocurrencies Recover From The Recent Sell-Off.
Bitcoin’s price increased on Tuesday as the digital asset market recovered from a recent selloff. However, a complex macroeconomic environment, including rising bond yields, continues to be a negative for cryptocurrencies.
Bitcoin has risen 4% in the last 24 hours to around $41,000. On Monday, the top cryptocurrency’s price fell below $39,000 at times, but was presently trading above $40,000, returning to a range witnessed throughout the previous week.
“Traders appear to be waiting on the sidelines, despite slowing volume,” a team of experts at cryptocurrency exchange Bitfinex wrote in a report late Monday, before bitcoin’s daily gains reached their peak.
Smaller peer ether also was rising, up 4.5% to above $3,000. The token underpinning the Ethereum blockchain network slipped below $2,900 in the depths of Monday trading.
Altcoins have also seen similar price movements. Luna was one among the biggest gainers, jumping 15% from its low position on Monday, which had been since mid-February. Both cardano and solana were up roughly 5%.
“Memecoins”— called that because they were initially intended as internet jokes rather than significant blockchain projects — also were higher, with dogecoin and shiba inu both up 3% to 4%, respectively.
In recent weeks, macro dynamics in broader markets have put pressure on bitcoin and other digital assets. Markets expect the Federal Reserve to raise interest rates multiple times this year and next as it fights unusually high inflation.
While cryptos should technically trade independently of traditional financial markets, they have been shown to be associated with other risky assets such as tech stocks.
If the Fed raises interest rates and borrowing costs, economic demand would be affected, and investor sentiment toward riskier assets, such as cryptos, will be harmed as well.
Bond yields have risen in tandem, reducing the extra return investors expect from safer bets on bonds against riskier wagers on equities and digital assets. On Tuesday, the yield on the 10-year US Treasury note surpassed 2.9%, after closing at a new pandemic-era high of 2.87% on Monday.
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