Bitcoin above $50,000, Cardano above $3 as cryptocurrencies surge

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By Samuel Indyk

Investing.com – Major cryptocurrencies were surging higher on Thursday morning with Bitcoin trading back above $50,000 and the new number three cryptocurrency, Cardano, trading above $3.00 for the first time.

Weak ADP (NASDAQ:ADP) lifts prices?

Wednesday’s ADP employment report was worse than expected, with ADP reporting just 374,000 jobs were added in August versus expectations of 613,000. The disappointing figure sets the tone for Friday’s official Nonfarm Payrolls report.

The Fed has consistently said that “substantial further progress” towards their labour market goal has yet to be met, although it is getting closer. A weak report on Friday could see the Fed push back their timeline for beginning to taper asset purchases to later in the year. A strong report on the other hand and the Fed’s September meeting could see the announcement that the world of financial markets has been waiting for.

If there is any hint of a delay to the Fed’s taper timeline following bad employment numbers tomorrow then that could be seen as positive for Bitcoin and other major cryptocurrencies given the prospect of looser monetary policy for longer.

DeFi coins continue to outperform

Although Bitcoin has had a strong 24 hours, the gains in cryptocurrencies linked to Decentralised Finance (DeFi) applications and non-fungible tokens (NFTs) continue to outperform.

Ethereum is up over 6% in the last 24 hours, continuing its recent rally as it looks to reclaim $4,000. Year to data, Ethereum is up over 400% compared to Bitcoin’s 73% gain.

The increasing demand for NFTs has helped push Ethereum higher. Corporations from Visa (NYSE:V) to Anheuser Busch Inbev (BR:ABI) have announced ventures into the NFT market in recent weeks and the euphoria over the burgeoning sector is showing no signs of slowing.

And it’s not just Ethereum that’s benefitting from the NFT craze. Two upcoming ‘Ethereum killers’, Solana and Cardano are both also showing no signs of the rally slowing down.

Both cryptocurrency projects have a similar aim and use case to Ethereum, such as DeFi apps and NFTs.

SEC comments

Yesterday, the Financial Times published comments from the head of the US Securities and Exchange Commission Gary Gensler on regulation.

“At about $2 trillion of value worldwide, [the cryptocurrency market] is at the level and the nature that if it’s going to have any relevance five and 10 years from now, it’s going to be within a public policy framework,” Gensler said in an interview. “History just tells you, it doesn’t last long outside. Finance is about trust, ultimately.”

There can be no doubt that regulation is coming to the cryptocurrency industry in the US but many have taken these latest comments from Gensler as positive for the industry.

Regulation could help legitimise the asset class and would provide additional security and reassurance to investors who are cautious about investing in cryptocurrencies currently.

Where next for Bitcoin?

After trading above $50,000, the next area of resistance comes around $51,000 which marks the 61.8% Fibonacci line from the April high to July low.

Jeffrey Haley, Senior Markets Analyst at OANDA identifies the 200-day moving average (DMA) as a key level of support.

“Notably, Bitcoin dips over the past fortnight have all stopped just ahead of the 200-day moving average, at $46,000,” Halley said.

“I remain bullish on Bitcoin as long as the 200-DMA holds on a daily closing basis.

“The technical picture suggests a move higher through $50,500 sets up further gains targeting $58,000.”

Bitcoin above $50,000, Cardano above $3 as cryptocurrencies surge

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