Cryptocurrencies continue to rise, but optimism could be overblown
Cryptocurrencies continue their bullish climb on Wednesday, with the bitcoin (BTC) exceeding 35,000 Dollars for the first time in almost two months. Ethereum (ETH), for its part, also rose, but more moderately, standing at $1,880.
This rebound occurs in a context of growing optimism among investors, who expect a market recovery after the sharp decline recorded in recent months. Howeversome experts warn that this optimism could be exaggerated and that cryptocurrencies could be overvalued.
What is driving the rally?
There are several reasons that could explain the cryptocurrency rally.s. One of them is the expectation that exchange-traded funds (Bitcoin ETFs) are approved in the United States. The Securities and Exchange Commission (SEC) is evaluating two BTC spot ETF applications, and an approval could provide a significant boost to the market.
Another reason ands the rise of institutional investment in cryptocurrencies. Investment funds and financial services companies are increasingly interested in cryptocurrencies, and this interest is helping to increase demand.
Is the rebound sustainable?
Experts are divided on whether the cryptocurrency rally is sustainable. Some believe that optimism is justified and that cryptocurrencies could continue to rise in the coming months. Others believe that the rally is overblown and that cryptocurrencies could suffer a correction in the future.
Bitcoin: the catalysts that could drive the market
An approval of BTC spot ETFs would be a major catalyst for the market. An increase in institutional investment in cryptocurrencies would also be positive.
However, there are also some factors that could slow the rally. An economic downturn could trigger a sell-off in risky assets, including cryptocurrencies. A tightening of monetary policy by central banks would also be negative.
Meanwhile, cryptocurrencies continue to rise, but optimism could be overblown as investors should be aware of the risks before investing in cryptocurrencies.
Source: Ambito
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