The cryptocurrency rally accelerated this week, with Bitcoin nearing the crucial resistance level of $120,000 and the Fear and Greed Index moving into the greed zone of 67. This article answers a common question: “why did crypto go up today?”
Chinese crypto trading hopes
The first main catalyst for the ongoing cryptocurrency rally is the optimism that Chinese companies will get involved in the industry. This optimism pushed most brokerage stocks to their highest levels in months.
Further, a Shanghai regulator said that it would explore and intensify research on the industry. This is a significant development, as China banned cryptocurrencies a few years ago.
Therefore, analysts expect that the country will ease rules for investing and trading these coins. Such a move will lead to higher volume since most of the Chinese trading happens “illegally.”
Bitcoin, Ethereum, Solana, and XRP ETF demand
The other main reason why crypto is going up today is the ongoing surge in demand for cryptocurrency ETFs. Bitcoin ETFs had a whopping $1 billion in inflows on Thursday, bringing the cumulative figure to over $51.3 billion.
Similarly, Ethereum ETFs have over $383 million in inflows, pushing the cumulative figure to over $5.1 billion for the first time on record. BlackRock’s ETHA ETF has over $5.6 billion in assets, while Grayscale’s ETHE and ETH have over $3.2 billion and $1.5 billion.
The other top crypto ETFs have also added more assets in the past few months. For example, the Teucrium 2x Long Daily XRP (XXRP) has over $189 million in assets, while the newly launched REX-Osprey SOL + Staking ETF (SSK) has added $61 million in assets.
These numbers indicate a substantial demand for these coins among investors. Analysts expect the SEC will approve several altcoin ETFs, including XRP, Solana, Bonk, and Dogecoin.
Bitcoin and Ethereum ETF inflows are happening at a time when data shows that their supply on exchanges are in a strong downward trend. As such, high demand and low supplies will often lead to higher supplies.
Federal Reserve interest rate cuts
Cryptocurrency prices are also going up because of the rising hopes that the Federal Reserve will start cutting interest rates later this year. In a statement on Thursday, Christopher Waller, a member of the Fed’s Board of Governors, said that he supported cutting interest rates later this month.
Donald Trump has called for the bank to cut rates by 300 basis points. This is notable since Trump is set to appoint the next Fed Chair who will replace Jerome Powell when his term ends. Powell may decide to either quit or remain at the Fed, where he will serve as governor.
Trump will likely select a Fed Chair who will commit to drop interest rates sharply. He has even hinted that he may appoint a Fed Chair long in advance in a move to undermine Powell. Risky assets like stocks and cryptocurrencies often do well when the Fed is cutting rates.
Bitcoin price strong technicals
Crypto is going up because of Bitcoin’s strong technicals. It has formed a cup-and-handle pattern and a bullish flag. Also, it has remained above all moving averages, while top oscillators like the Relative Strength Index (RSI) and the MACD have all rallied.
Therefore, the coin will likely continue rising as bulls target the key resistance level at $150,000. Such a move will likely lead to more crypto market rally.
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