Why Ethereum, Bitcoin, and Dogecoin Rallied Today

Major cryptocurrencies hit new highs thanks to multiple tailwinds.

Several major cryptocurrencies rallied today amid a confluence of positive factors, including a potential short squeeze, technical trading tailwinds, and, perhaps most surprisingly, geopolitical tailwinds from large Chinese asset managers. I started the week with.

After all, the price at the end of Monday’s regular meeting was Ethereum (Ethereum 7.16%) Increased by 9.1% Bitcoin (BTC 2.65%) 3.8% increase; dogecoin (Doge 1.14%) It rose by over 2%.

Possibility of virtual currency short squeeze and technical tailwinds

according to coin glass data This morning, digital asset markets experienced more than $176 million in liquidations in the past 24 hours, with the majority (approximately $124 million, or 72%) coming from the liquidation of open short positions.

The prices of major cryptocurrencies have been rising in recent weeks, due to strong inflows into Bitcoin ETFs, the impending Bitcoin halving event, and the launch of the first spot Ethereum exchange traded fund (ETF). A combination of factors, including expectations for possible approval, are driving the move. ) — Short sellers appear to be effectively forced to close out their bearish positions. The resulting surge in purchasing demand could lead to a so-called short squeeze, further pushing digital asset prices higher in the process.

On the other hand, technical trading patterns may also be at play. According to TechDev, a widely followed Bitcoin analyst on social media platform X, the price of Bitcoin is: Integration beyond the core technology level And the world’s most famous cryptocurrency preceded a huge rally at a historic trading average.

Will China enter the Bitcoin ETF market?

If that’s not enough, Chinese financial news site Securities Times reported on Monday that several China-based financial giants, including Harvest Fund and Southern Fund, have filed for their own spot Bitcoin ETFs through their Hong Kong subsidiaries. reported that it had been submitted. These applications are currently awaiting regulatory approval.

This news is particularly important given China’s past public hostility towards Bitcoin. In 2021, China’s top regulators will also Prohibits trading and mining of cryptocurrencies, the price of Bitcoin at that time plummeted. However, in recent years it has become clear that China’s crypto ban is not absolute, with crypto trading and mining reportedly continuing to flourish in the country. If China is indeed softening its stance, it could only serve as the latest significant validation of the global adoption of Bitcoin and other cryptocurrencies.

The US Securities and Exchange Commission (SEC) only approved the world’s first 13 Bitcoin ETFs in January 2024. This historic approval served as arguably the most significant validation of cryptocurrencies as a legitimate investment asset class to date. ETFs are much more accessible to everyone, as they can be bought and sold throughout the regular trading day through almost any online brokerage firm, as opposed to requiring investors to set up a separate crypto trading account with a crypto specialist firm. It is an investment medium that is easy to access. Are you considering making cryptocurrencies an important part of your portfolio?

Since then, Bitcoin ETFs have seen huge inflows. For example, late last month, ARK 21 Stock Bitcoin ETF (NYSEMKT:ARKB) It recorded net inflows of over $200 million, making it the third Bitcoin ETF in the U.S. to exceed $200 million this year.

For comparison, China’s Harvest Fund and Southern Fund manage total assets of over $230 billion and $280 billion, respectively. Therefore, if their Bitcoin ETF application passes regulatory review through their Hong Kong subsidiary and the mainland Chinese government continues to opt for a more cautious approach with indirect approval, it could lead to greater adoption of cryptocurrencies in the long run. It has the potential to represent major positive changes. The world’s second largest economy.

That certainly doesn’t guarantee that Bitcoin, Ethereum, and Dogecoin will continue this incredible rally indefinitely. But in general, as cryptocurrencies continue to gain popularity on a global scale, it is no surprise that the prices of the most prominent digital assets continue to reach new highs.

Steve Symington has no position in any stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.

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