Cryptocurrencies rose on Tuesday on the back of strengthening stock indices and falling protective assets like gold, the yen, and treasuries. Bitcoin started its rise before the news about Russia and Ukraine hit the wires and sparked risk-on sentiments.
Technical factors may have influenced the first cryptocurrency's strengthening, with BTC pushing back from its 50-day moving average, which has been acting as a support level for the past week. Russia has proposed allowing cryptocurrency mining in specific regions and imposing taxes on the conversion of crypto assets into fiat and is making progress in testing the digital rouble with the first interbank transfers.
Bitcoin rose on Tuesday to its highest level in the past week (+4.4%), ending the day around $44,100, where it is trading on Wednesday morning. Ethereum jumped 7.3% on Tuesday, settling at $3100, while other leading altcoins from the top 10 also added: from 1.7% (XRP) to 12% (Avalanche). Overnight, crypto market capitalisation rose 2% to $1.98 trillion, according to CoinMarketCap estimates.
Since early January, the market has not been consistently above the 2 trillion mark, and consolidation above could be an essential signal for bulls to move from observation to active buying. Since the end of January, there has been a notable uptrend support line that can be drawn through the local lows, which sets up optimism in the short term.
The two largest cryptocurrencies, BTC and ETH, are attempting to consolidate above their 50-day averages, which previously signalled the end of a bearish phase. This was primarily made possible by optimism on Wall Street, where investors continue to buy out drawdowns. Altcoins showed outperformance, which led to a 0.3 percentage point decline in the Bitcoin Dominance Index to 40.4%. The Fear & Greed Index climbed from 46 to 51, moving into the Neutral from the Fear territory.
