Why Bitcoin, Ethereum, and Dogecoin Are Continuing to Rise Today

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what happened

Today’s been another solid day in the world of cryptocurrencies. The overall crypto market has ticked nearly 2% higher over the past 24 hours, as of 12:30 pm ET. This move has been led by Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), and Dogecoin (CRYPTO: DOGE), which have appreciated 1.5%, 4.3%, and 2%, respectively, over this same time frame.

Broadly speaking, it appears investors are looking fondly upon the commentary presented by the Federal Reserve following its decision to hike rates for the first time since 2018 yesterday. It appears much of the bearish sentiment that preceded this announcement has transformed into the idea that perhaps these hikes are now priced into the market. From a macro perspective, this is a good thing.

Image source: Getty Images.

For Bitcoin specifically, a weakening US dollar and growing risk-on appetite in other asset classes such as equities continue to be key drivers of interest in the world’s top digital currency. Ethereum investors are looking positively upon news that the Kiln testnet has been launched. This is perhaps the final pivotal update needed before the Etheruem network can be fully transitioned to a proof-of-stake validation mechanism. And Dogecoin, like usual, appears to be tracking its mega-cap cryptocurrency peers today.

So what

Overall, the crypto market appears to be in what I would call a consolidation phase right now. Investors seem to be holding steady with their positions, as crypto holders attempt to determine how to navigate this higher interest rate environment. Various macro factors are likely to impact the price of Bitcoin perhaps more than its peers, given Bitcoin’s perception as a gauge of investor demand in the alternative crypto asset class.

Ethereum’s testnet launch is certainly another big deal investors are watching right now. How this testnet performs will be a key factor that will determine how quickly Ethereum will be able to merge this testnet with its mainnet, to become a proof-of-stake token once and for all. This shift toward a proof-of-stake validation mechanism isn’t only better for the environment, but many experts believe will lead to lower costs and faster speeds for end users.

Now what

The price fluctuations we’ve seen of late in the crypto world appear to be mainly a function of investor sentiment and macro market dynamics. This year, there have been plenty of macro catalysts and headwinds that have driven significant volatility in this sector.

That said, it’s important to consider the token-specific catalysts that are at play with a number of these tokens. For Ethereum in particular, the next few months are likely to be pivotal for this cryptocurrency.

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Chris MacDonald owns Ethereum. The Motley Fool owns and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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