Why Bitcoin, Ethereum, and Solana Popped on Saturday


What happened

Weekends have been good for the cryptocurrency market recently, and today is no different. After enter values ​​last saturdaythe move has been repeated this weekend, with green throughout the market.

Starting at 9:00 am Eastern time, Bitcoin (BTC 0.77%) has jumped up to 8.6% in the last 24 hours, Ethereal (ETH -1.32%) gained 5.9%, and Solarium (SUN 0.18%) rose 19%. Those moves have slowed slightly and the tokens are now up 5.5%, 2%, and 6.9%, respectively, in the past day.

And

The macro driver of the crypto movement is clearly the economic and monetary context. Recent data has shown that inflationary pressures are easing and there is speculation that the Federal Reserve will ease interest rate hikes in the coming months. Earnings season has also started and the results have been strong for the banking industry. That is prompting investors to re-invest in riskier assets like cryptocurrencies.

On Thursday night we obtained the long-awaited bankruptcy of the Genesis crypto company. This is certainly bad from a cryptocurrency visibility standpoint, but it also hasn’t caused much concern within the industry because withdrawals have been blocked since November.

The next shoe to drop may be Genesis parent company Digital Currency Group (DCG), which has run into its own funding problems related to illiquid assets and losses from FTX and Three Arrows Capital by filing for bankruptcy.

Investors like certainty, and while the Genesis bankruptcy is not good for the industry, it brings more clarity to the situation. We are also seeing fewer side effects from the bankruptcy of these companies. You might remember that Three Arrows Capital went bankrupt last summer and it took months for that to lead to the collapse of FTX and the resulting drop in Solana’s value.

Genesis and DCG likely to go bankrupt or become a fraction of themselves are priced to market and don’t seem to have the same downstream effects on other businesses.

While all this has been going on, Solana, in particular, has held up extremely well. The blockchain has become faster and more reliable, thanks to recent updates, and both developers and users seem to stay on the blockchain instead of looking for alternatives.

Now what

The recent trading momentum is good news for cryptocurrency holders, but it may not last. Short moves are often driven by momentum and short contractions, including the liquidation of $385 million of short positions in the last 24 hours.

What encourages me is the level of blockchain activity on Ethereum and Solana in particular. Developers continue to build for the blockchain, and non-fungible token projects on both blockchains have garnered market attention, including Checks on Ethereum and Claynosaurs on Solana.

As developers and entrepreneurs continue to build, these tokens will have increasing value in the world. But progress will be patchy, just like the price of cryptocurrencies. I am optimistic about the future, but I am fully aware that volatility can easily send the market lower at any time.

Travis Hoium He has positions in Ethereum and Solana. The Motley Fool has positions and recommends Bitcoin, Ethereum and Solana. The Motley Fool has a disclosure policy.

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