Today, some impressive momentum is returning to the crypto market. Various crypto stocks including Bit Digital (NASDAQ:BTBT), SOS (NYSE:SOS), Marathon Digital (NASDAQ:MARA) and Canaan (NASDAQ:CAN) are up significantly today. Each of these crypto-related stocks are up by various margins.
Indeed, today’s rally from Monday’s rather dismal performance among growth stocks has been welcome. For those investing in crypto stocks, this rally has been well-received today.
A range of headwinds have plagued the crypto sector in recent weeks. The latest in a string of crypto bans out of China has resulted in some serious worries about the viability of blockchains. That’s because the Chinese crypto market is the largest in the world. Accordingly, those bullish on this sector need to be bullish on China’s outlook on crypto.
However, the market appears to be brushing off these concerns today. Let’s take a look at what’s driving the positive price action for crypto stocks right now.
Crypto Stocks Higher on Return of Positive Sentiment
Strong sentiment from market participants has driven crypto prices significantly higher in recent days. In fact, today, the price of Bitcoin (CCC:BTC-USD) breached $50,000 for the first time in a month. That news has been enough to buoy many stocks dependent on crypto prices, such as the aforementioned group.
Additionally, various talking heads have begun to increase their bullish commentary on the crypto space. Tesla CEO Elon Musk resumed his crypto-pumping antics in recent days, touting pictures of his dog “Floki” on social media. Accordingly, various meme tokens have taken off along with larger cap tokens, causing an upward spiral in the prices of many cryptocurrencies in recent days.
Can this momentum continue? Time will tell. However, it’s important to note that many of these incredible moves have also been proven to be short-lived in the past. Investors taking an aggressive approach to the crypto space ought to be doing so in a diversified and cautious manner.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
