This is an upward trend over the last few days since the data from CoinGecko show that 9 of the 10 most capitalized cryptocurrencies are in the green. The price increases vary from around 6% for BTC to 12% for Cardano or even almost 24% for Dogecoin which closes the top 10, at the time of writing.
TOTAL crypto market cap: no one home until 1.047 TRILLION pic.twitter.com/4gZq6PZH54
—Richard Barry (@irishchink) October 27, 2022
This price rally pushed the capitalization of the entire industry above the trillion (1,000 billion) dollars, in a bear-market context.
For some analysts, the increase observed in prices would be linked to the decisions of the US Treasury. During a recent outing, the co-founder of BitMEXArthur Hayes, indicates for example that the department plans to offer short-term Treasury bills to investors, which would make it possible to cope with future price increases.
At the same time, macroeconomic conditions are improving in the world’s largest economy. For example, the index of dollar (DXY) pegged to the performance of the greenback against a basket of major global currencies has seen declines in recent weeks.
It fell to $109.9 on Thursday, 4.20% lower than its peak last month. On the contrary, it would favor a surge in the price of crypto-assets.
Global crypto market cap back to $1 trillion 💪 pic.twitter.com/RiVcAMfp4H
— 🍪🍪Farhan Shaikh 🍪🍪 (@Umars1992) October 26, 2022
The appointment of a new Prime Minister in the United Kingdom, crypto-friendlycould also explain the currently perceived positive sentiment in the market.
Short-term downside risks?
As a reminder, the cryptocurrency market is very unstable when it comes to prices. In this case, the increase observed in recent days could quickly be mitigated by a combination of headwinds, led by an increase in the key rates of the American Federal Reserve (Fed).
Certainly, the comments made last week by San Francisco Federal Reserve Chair Mary Daly do point in the direction of a decline.
A survey of a panel of investors conducted by MacroMicro has also shown that their opinion also relates to a reduction in the Fed’s aggressive interest rate policy.
However, the meeting of the institution’s monetary policy committee scheduled for November should indeed increase the key rates of the Fed 75 basis points (0.75%). This rise will temporarily have a negative effect on cryptocurrencies, as less risky Treasury bonds are preferred to risky assets such as the Bitcoin Where Ether.
Additionally, third-quarter earnings from most tech giants will be available in the coming days, and poor performance from companies like Apple and Microsoft historically leads to a decline in crypto stocks.
This decline will also lead to a drop in the market capitalization of the industry.
Bullrun from 2024?
Despite all the pessimistic news of the last few months and those that could arise in the coming months, it should be noted that the cryptocurrency industry is showing a rather interesting resilience.
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Bull market confirmed? Industry capitalization jumps back above $1 trillion – The ₿log
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