What happened
Risk assets are soaring today, ahead of what’s expected to be a busy couple of weeks on the macro front. Next week, investors will receive updated CPI numbers that could influence how aggressive the Federal Reserve will be during its Sept. 20-21 meeting. Today, the market appears to be taking the view that inflation pressures will ease, lending to more accommodative monetary policy moving forward. For cryptocurrencies and equities alike, these hopes are bolstering asset prices across the board.
However, three top-10 tokens that many crypto investors are watching today are Solana (SOL 4.49%), Cardano (ADA 3.51%), and XRP (XRP 2.43%). As of 1 p.m. ET, these digital currencies have surged 4.7%, 4.9%, and 4.2%, respectively, over the past 24 hours. In addition to macro tailwinds, each of the tokens has their own catalysts investors are watching.
Solana’s network recently passed a key psychological threshold of 95 million transactions, with numbers quickly approaching 100 million. As a gauge of adoption, the transaction data are very bullish for those who believe Solana can continue to gain market share in the DeFi world.
Excitement around Cardano’s upcoming Vasil hard fork continues to drive this token higher today, alongside broadly bullish macro factors. Like Ethereum, Cardano’s massive upgrade is expected to boost the efficiency and performance of its network — something investors are keen to see.
Finally, a partnership with a Web3 firm in Japan to boost metaverse adoption in Asia has XRP trending higher today. Despite ongoing litigation with the SEC, this is a token investors appear to be taking a more bullish stance on right now.
So what
There’s a lot to unpack with the crypto market right now. Should a more dovish outlook prevail from the Fed in the weeks to come, perhaps today’s rally can be maintained. Right now, uncertainty remains high, with probabilities for rate moves continuing to change on a daily basis. With quantitative tightening now starting, it’s unclear how fast and aggressive the Federal Reserve will need to be moving forward.
Aside from macroeconomic factors that affect all risk assets, individual cryptocurrencies each carry their own unique set of growth drivers and headwinds. For investors in Solana, Cardano, and XRP, the catalysts appear to be in focus right now, as risk-on sentiment takes hold.
Now what
The question many investors have right now is whether any sort of meaningful rally can be sustained. This year, the crypto market has continued to descend downward in a rather orderly fashion. Most bounces have turned out to be bear market bounces, with lows being retested almost across the board.
That said, should investors be looking to take on risk, cryptocurrencies could see more interest in the near to intermediate term. This is an asset class investors may have kicked themselves for ignoring during previous declines. Accordingly, bulls may be positioning themselves for a meaningful rally through next year, if conditions allow.
Chris MacDonald has positions in Ethereum and Solana. The Motley Fool has positions in and recommends Ethereum and Solana. The Motley Fool has a disclosure policy.
