As tensions between Russia and Ukraine seem to be lessening, cryptocurrencies climbed alongside US markets on Tuesday.
According to Clara Medalie, research head at cryptocurrency market data provider Kaiko, the swings are likely a “natural market surge” after it had been “resolutely neutral” for much of the previous week. Both Ether and Bitcoin have broken through previous barriers and are on their way to one-month highs, according to her.
She also mentioned that “The past month has been bearish for nearly all crypto assets following a prolonged bout of low liquidity and macro-induced volatility. It remains to be seen whether this upside break has conviction, with bitcoin still trading nearly $20,000 below previous all-time highs.”
Tuesday’s gains come after Moscow announced that after training maneuvers near the Ukraine border, the Russian Defense Ministry has started returning several troops to deployment sites.
As the disagreement threatened to escalate, Bitcoin traded choppy on Monday, while markets ended the day lower. Moreover, for several months, Bitcoin has been performing like more conventional risk assets as its investor base has grown more institutionalized.
Although the rebound is positive, it also demonstrates that the connection between digital and traditional markets is “as strong as ever,” according to Leah Wald of Valkyrie Investments.
She added that “Going forward, we believe the expected rate hikes are priced in and will not have much effect on prices. Additionally, fundamentals including active wallet addresses, total transactions, and multiple crypto asset apps ascending to the top of app store download charts after the Super Bowl shows there is still strong interest in and demand for Bitcoin and altcoins. We remain firmly bullish and stand behind our belief that the second half of this year is likely to see a strong rally in digital assets, including Bitcoin.”
Positive market sentiment is clearly helping each of these currencies gain traction. The prospect of large-scale conflict has put markets on edge in recent days, with most risk assets pricing in a gloomy occurrence. Regrettably, for cryptocurrency investors, these digital assets are becoming more widespread and, as a result, are tracking traditional assets more precisely, such as shares.
When it comes to token-specific catalysts, Bitcoin, Ethereum, and Binance Coin each have their own set of characteristics that investors appear to prefer. Institutional adoption of Ethereum and Bitcoin is still a hot topic among investors, with Ethereum-based funds having seen a recent rise in interest. There is a lot to admire about the potential capital flows into this industry, at least for meg-cap tokens, if this trend continues.
The renaming of Binance Smart Chain to BNB Chain may appear insignificant. Nevertheless, investors have shown that marketing is vital and considering Binance Coin’s recent spike in popularity as an Ether blockchain alternative, this move may encourage even more interest in the future.
Furthermore, the cryptocurrency sector’s daily price movement is still volatile, and it’s likely to stay that way for some time. Because these digital assets are difficult to value, they are subject to bigger price volatility in response to macro news. However, the underlying triggers that these coins are experiencing right now are intriguing in and of themselves.
Investors who are looking at the three main cryptocurrencies may be pleased with how the big picture is now shaping up. Overall, this market is still moving in the correct direction, but in a turbulent manner.
The Bottom Line
Ethereum (ETH), Bitcoin (BTC), and Binance Coin (BNB), the top three cryptocurrencies by market cap (excluding stablecoins), are witnessing a solid bounce with risk equities.
The relief over previous geopolitical concerns arising from the Russia-Ukraine conflict appears to be driving this comeback in cryptocurrency markets. Various stories of de-escalation have investors returning to purchasing the drop, with speculative assets enjoying the most gains.
Bitcoin fell below $43,000 per token yesterday; however, has subsequently recovered to over $44,000 per token as of this writing. With institutional investment in Ether surging, numerous ETH-focused ETFs are experiencing increased capital flows, pushing the price of this asset higher. Lastly, today’s rebranding of Binance Smart Chain to BNB Chain seems to be helping Binance Coin.
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