Bitcoin and Ethereum are now seeing bull run, as DeFi projects continue their explosive growth and things seem to have settled into a groove of growth.
After a week where pump and dump schemes rattled cryptocurrencies and fiat markets, markets have turned green now.
Global market capitalization is up a healthy 6.9% according to Nomics, with all projects now worth $1.12 trillion, or 15% of gold’s total market capitalization.
The main driver is bull run of both Bitcoin and Ethereum. Between the two projects, they make up 75% of the total market cap of all of crypto, so when they have a good day, it looks everyone else does.
Bitcoin faced 6.9% gains over night, as investors seem to be pouring back into the currency after its middling start to February. Nomics data shows that trading volume is up nearly 5% in the last 24 hours.
But this recent flurry of activity, according to Market Milk, has pushed Bitcoin’s position into the overbought level, with many other technical indicators sliding that way too.
Ethereum, meanwhile continued its hot streak, adding another 10% to its market capitalization in a single day – that’s the second straight day of double-digit gains.
This run of good fortune put the project beyond the $1,500 mark for the first time and has managed to stay there to record a new all-time-high (ATH). The reason is DeFi. Decentralized finance apps have been on a charge lately, locking up a record $30 billion in smart contracts. A number that’s doubled since the beginning of January.
Driving that growth has been the big three, Maker, Aave and Compound, who collectively have more than $13 billion locked up on their books. All of which use Ethereum blockchain, helping drive ETH up to never before faced highs.
Like crypto, fiat markets hit a purple patch yesterday as it too moved on from the r/WallStreetBets take over of the markets last week.
The Dow, S&P 500 and Nasdaq closed higher by more than 1%, with all 11 indicators in the S&P 500 in the green. The good news seems to be a reaction to President Biden’s “productive” talks with Republican senators over a coronavirus stimulus package. In parallel, earnings report from Alphabet and Amazon pushed up tech stocks, with futures markets all up in after-hours trading.
But the rally in the markets came at the expense of shares of some of the stocks that had been popularised by r/wallstreetbets investors last week. GameStop which more than halved on Tuesday to $60 per share, and AMC Entertainment, which dropped by more than 40%.
But while the markets appeared to gain a more stable footing, some are concerned that there’s not a lot of room left for stocks to grow and a correction may be seen soon.
“I’m a bit concerned that we are due for some sort of digestion of gains,” Sam Stovall, CFRA Equity Research Strategist, told Yahoo Finance.