Why Bitcoin, Ethereum and Dogecoin are rising today

Bitcoin (CRYPTO:BTC), Ethereum (CRYPTO:ETH)And Dogecoin (CRYPTO: DOGE) are responsible for more than 71% of the entire crypto market. So if these three tokens rise 5%, 7.2%, and 4.4% respectively (as of 1:30 p.m. ET), that will move the needle.

Today's market-wide rise appears to be related to a variety of macroeconomic factors that are providing a boost to all risk assets today, including stocks. Bullish sentiment continues to build around a no-landing or soft landing scenario, thanks in part to positive bank earnings.

From an industry-specific perspective, a number of other factors play a role. Let's examine what's moving these three tokens so strongly today.

Bitcoin is the pioneer

As is usually the case, as Bitcoin goes, so does the market.

Today's rise in Bitcoin prices appears to be due to three factors. First, a wave of economic stimulus heading to Chinese markets has investors bullish on globally traded assets. Bitcoin certainly falls into this category, with Chinese-related demand among the biggest drivers for the world's largest cryptocurrency by market capitalization. The assumption seems to be that even if a tiny portion of the capital entering Chinese markets finds its way into Bitcoin (and therefore Ethereum and Dogecoin), that will be good for the entire crypto market.

Bitcoin’s rise above the key $65,000 level is also due to simple supply and demand factors. Net inflows across all Bitcoin ETFs exceeded $400 million in the last 24 hours. Most of the overall movement in inflows came from Bitcoin (with Ethereum seeing a slight outflow over the past day). However, this move has signaled to some investors that Bitcoin's dominance in this space may be far from over.

Finally, there are seasonal trends affecting all three digital assets that many crypto analysts believe could increase speculative interest in these assets in the short term. The so-called “Uptober” reflects traders’ expectations regarding the performance of digital assets in the month of October. Based on data from 2013, crypto assets are up about 23% on average this month. That alone is enough to get many investors excited.

Is this just a short-term noise?

The longer-term uptrend in major cryptocurrencies such as Bitcoin, Ethereum and Dogecoin appears to be intact for now. This short-term rise in digital assets coincides with moves we are seeing in higher risk stocks. Investors should pay close attention to this connection.

We'll have to see what happens when other risky assets start to trend lower, and what a potential recession could mean for both tech stocks and cryptos. But until we have one (no cryptocurrency has been around long enough to feel the effects of a prolonged recession) and the narrative of a soft landing is firmly established, this move may not be just short-term noise after all. We'll see.

The story continues

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

Why Bitcoin, Ethereum, and Dogecoin Are Pushing High Today was originally published by The Motley Fool