Possible reasons why Bitcoin and Ethereum are on the way to mining

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

Bitcoin, the most popular cryptocurrency, finally broke through on December 5, 2022, when it broke above the $17,000 resistance level and is gradually approaching $17,600 – a development that will excite crypto enthusiasts. Similarly, Ethereum also broke through the $1300 barricade and is gradually shooting towards $1350.

Also read: Senior Binance executive says the company may not have an exchange in 10 years

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

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

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

Also read: Nigerian authorities to tax cryptocurrency and other digital assets

Possible reasons for the increase in Bitcoin and Ethereum values

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

With Bitcoin and Ethereum rising, altcoins are also following and adapting to the upward price movement.

One potential driver is that mention of the “market bottom” is making the rounds on social media again, as investors seem to believe that enough time has passed since the bear market began. Data from Arcane Research suggests that the current bear cycle now matches the bear market cycles of 2014 and 2018;

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

Well, a recent speech by US Federal Reserve Chairman Jerome Powell suggests that the central bank may begin slowing 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 hikes as we approach the level of restraint that will be sufficient to bring down inflation.”

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

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

Volatility is a significant characteristic of the crypto market. After a terrible and unimpressive period, the major cryptocurrencies and the market in general are starting to move towards optimism as this week suggests.

This is a good sign for investors who have lost hope in the market’s trajectory. But care must be taken to avoid an unforeseen loss. Therefore, crypto investors are advised to closely monitor the market as it returns to its former sophisticated atmosphere.

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