Cryptocurrency markets continue their bullish rise this week, with Bitcoin and Ethereum prices showing a significant improvement over the past seven days. The crypto market saw substantial bullish price action on Tuesday, which seems to continue today. The global cryptocurrency market cap is once again in bullish territory, currently at $1 trillion, up 3.30% in the past 24 hours. Let’s look at relevant news affecting prices today.
Key Points:
One reason for the recent bullish price action is due to Bitcoin’s short squeeze. According to Investopedia, a short squeeze is an unusual condition that triggers rapidly rising prices in a stock or other tradable security.
A short squeeze occurs when many investors are betting on the price falling, but the market jumps higher unexpectedly, gaining momentum. During a short squeeze, the bears exit their positions and cut their losses, accelerating the rise of a stock or security. In other words, people FOMO into the market, which causes further price growth.
Since Bitcoin has been trading in the $19k range for quite some time, the sudden spike past $20k was a highly bullish indicator that many traders couldn’t ignore. Whether BTC will continue its rise past $21k is up for debate.
The recent rally has created much optimism among crypto enthusiasts that the year-long market winter might be over and a trend reversal might happen soon. While it’s still too early to tell, if the crypto market can maintain a $1 trillion valuation, that would provide much-needed optimism for traders looking to open long bullish positions in crypto.
Surprisingly, most stocks like the S&P 500, Dow Jones, and the NASDAQ aren’t performing as well as crypto is. Meaning that Bitcoin and Ethereum could finally be depegging from the stock market’s price action. As we covered yesterday, Bitcoin has been trending closer to gold over the past several weeks, providing an inflation hedge for investors and traders.
Ethereum has significantly outperformed Bitcoin over the past week, rising by 19% compared to Bitcoin’s 8% price hike. Looking at the dominance of the two crypto assets, BTC currently remains at 39.9% dominance, while ETH has risen to 19% dominance. While Ethereum’s market cap remains half of Bitcoin’s, if Ether continues to outperform BTC over the next several weeks, the market cap gap between the two cryptocurrencies will reduce significantly.
Today’s fear and greed index is at 33, quite higher than the previous week’s range of 20-23. The market is still in fear but is no longer in extreme fear like it has been in the past.
With the recent rise in prices, Bitcoin and Ethereum’s trading volume is also up significantly, 78% for BTC and 104% for ETH. We should expect the market to continue on its bullish trajectory for the rest of the week before testing support next week.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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