After a rough start to the year, this weekend brought some welcome good news for crypto fans. In the strongest rally of 2022, the crypto market sees a 17% surge, bringing the market cap over $2 trillion on Monday!
Bitcoin and Ethereum led the charge by adding around 15% each and overcoming key psychological resistance zones of $40,000 and $3,000 respectively. Moreover, widespread gains have pushed most digital assets back into green territory, including extra-volatile memecoins: Dogecoin is up 12% on the week, whilst rival Shiba Inu rocketed ahead with 30%.
One factor behind the timing of this rally is the return of the Asian markets from Lunar New Year Holiday. Enthusiastic trading from early Asian markets may have lit the fuse for this “mini-surge”, but whether it can be sustained remains to be seen, according to Bybit’s Igneus Terrenus. Given the catastrophic 40% loss between November and January, crypto still has plenty of ground to reclaim.
However, it is speculated that the crypto market may also have been stimulated by broader economic factors tied to tapering, inflation, and the buoyancy of tech stocks. Since the new year, digital assets have suffered alongside their tech stock counterparts as traders fled from speculative assets and towards more stable value assets, seeking security from increasingly hawkish monetary policy.
Yet positive earnings reports from numerous tech companies may well have brought some reassurance to investors last week. Referring to Amazon’s 13.5% surge on Friday, Asian markets analyst Andrew Sullivan said it was a sign that “some of these tech companies are able to adapt” to new circumstances. “As the mist clears and people take a longer-term attitude to [crypto], then you’ve seen them returning and taking advantage of buying the dip at the end of the day.”
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