After sharp declines across the board last week, polygon (MATIC-USD) +18%, ripple (XRP-USD) +13.4% and avalanche (AVAX-USD) +11.1% are perking up the most among major cryptocurrencies as investors widen their risk appetite.
Bitcoin (BTC-USD) +3.6%, the world’s largest digital token by market cap, is rising to over $21.2K as of shortly before 9:00 a.m. ET. BTC is up nearly 20% from its steep drop to $17.8K on June 18, but it’s still off around 65% from its November peak of $67.9K amid a broad liquidity crunch in the crypto industry.
Recall that some big players in the crypto lending business, namely Celsius, have recently suspended customer withdrawals in the wake of turbulent market conditions. On top of that, prominent crypto-focused hedge fund Three Arrows Capital is facing potential insolvency due to hundreds of millions of dollars in liquidations.
Similarly, ethereum (ETH-USD) +9.3% is extending its recovery to $1.21K, though down ~75% from its peak of $4.81K in November. Ether fans are waiting for its upcoming transition from Proof-of-Work consensus mechanism to Proof-of-Stake in a move that’s expected to improve transaction costs and the ability to scale.
While bitcoin (BTC-USD) experiences a slight recovery from last weekend, investor sentiment is still in “extreme fear” mode, implying that a bear market rally could be taking hold before an even steeper drop. However, some believe the bottom is in and it’s time to buy. Take a look at why SA contributor Josh Arnold is bullish on bitcoin.
The intraday upswing comes as stock futures also point to a higher open, with the tech-heavy Nasdaq (COMP.IND) +1.1% in the lead. The stock market, which recently dipped into bear market territory, is looking to break its weekly losing streak as investors scale back their interest rate hike expectations.
For crypto-related stocks, Coinbase (COIN) +1.3%, MicroStrategy (MSTR) +3.3%, Marathon Digital (MARA) +1.6%, Riot Blockchain (RIOT) +2.6%, Bakkt (BKKT) +1.6% and Bit Digital (BTBT) +2.6% are all trading in the green in premarket trading.
On the regulatory front, Louisiana governor had signed a bill allowing financial institutions to custody digital assets in the state.