Possible reasons Bitcoin and Ethereum are on the path of recovery

Adeniyi Odukoya
Possible reasons Bitcoin and Ethereum are on the path of recovery

Bitcoin and Ethereum, the two most prominent cryptocurrencies, have seen a slight increase as we near the end of the year. Despite a fantastic run in 2021, BTC and ETH have failed to meet the expectations of crypto enthusiasts and analysts this year.

Possible reasons Bitcoin and Ethereum are on the path of recovery

Bitcoin, the most popular cryptocurrency, finally broke through on December 5th, 2022, when it broke above the resistance level of $17,000 and is gradually approaching $17,600—a development that will excite crypto enthusiasts. Similarly, Ethereum also broke through the $1,300 barricade and is gradually skyrocketing towards $1,350.

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Major cryptocurrencies traded mixed early on December 5, as the international crypto market valuation spiked by 1.58% in the previous day to $865.67 billion. In the last 24 hours, the whole crypto market increased by 5.91% to $32.24 billion. 

Ripple, Dogecoin, Cardano, Polygon, Polkadot, Litecoin, Shiba Inu, OKB, and Tron are also with notable gains from the larger-cap altcoins. Binance Coin is among the few altcoins with minor daily declines. However, BNB still stands north of $300.

Possible reasons Bitcoin and Ethereum are on the path of recovery

Overall, the crypto market cap has added almost $20 billion in a day, and the metric is over $850 billion now.

Read Also: Nigerian government set to tax cryptocurrency, other digital assets

Possible reasons for the rise in Bitcoin and Ethereum values

Bitcoin breaking through the $17,000 barricade is an optimistic sign that the market may return to shape. Considering that the coin spent a good part of November stuck below the $17,000 handle in the spur of the FTX’s sudden bankruptcy. The recent recuperation has placed the minds of investors in an optimistic mood. 

With Bitcoin and Ethereum rising, altcoins are also following suit and aligning with the upward price movement.

One potential driving force is that mentions of the “market bottom” are making rounds on social media again, as investors seem to think enough time has passed since the bear market started. Data from Arcane Research suggests that the current bear cycle is now matching the bear market cycles of 2014 and 2018;

Other potential driving forces are related to global macroeconomics. For example, the rampant inflation in the economy caused the US Federal Reserve to hike interest rates at the most aggressive pace since 1980 this year. The increased interest rates were the primary driving force behind the overall bear market in crypto and traditional markets.

Well, a recent speech from the US Fed Chairman, Jerome Powell, suggests that the central bank might start to slow the aggressive pace of interest rate hikes, which could begin as soon as the upcoming December meeting.

In a recent speech at the Hutchins Center on Fiscal and Monetary Policy, Powell stated the following; “It makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down.”

This is likely the primary driving force behind this week’s market rebound.

What is the next step for crypto investors as Bitcoin and Ethereum rise?

Volatility is a significant property of the crypto market. After an awful and unimpressive spell, the major cryptocurrencies and the market generally are starting to edge towards optimism as this week suggests.

This is a good sign for investors who have lost hope in the market’s trajectory. But caution needs to be applied to avoid an unforeseen loss. Thus, crypto investors are advised to monitor the market closely while it returns to its previously sophisticated ambience.

This content is for informational purposes only and should not be construed as investment, tax or legal advice. It is strongly recommended that every recipient seek appropriate independent professional advice before acting on any information contained herein, as Technext provides no endorsement, opinion or advice, including investment, tax or legal, and makes no representation or warranty about the suitability of a product for a particular reader or circumstance.


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