Why is the crypto market surging? Why is the Bitcoin price rising today? – Here are some thoughts floating over the crypto space after the iconic rally of Bitcoin beyond $57,000. It was a sudden and unexpected rise, as Ethereum and other altcoins demonstrated strength while BTC prices plateaued for several days. While some saw a dynamic shift in focus away from the token, others correctly argued that it was simply an accumulation of strength before a massive breakout.
What’s Next? A new Bitcoin ATH?
Bitcoin was on the verge of losing the trillion-dollar mark due to previous price movements, but the latest spike has raised hopes that it will surpass the previous market cap high of $1.23 trillion. In the past 48 hours, more than $200 million in shorts have got ‘rekt’’ out of which Bitcoin shorts account for over $160 million. This could be the prime reason for a massive outbreak, as the traders have been more bullish on Bitcoin.
Coinglass data shows a significant increase in the number of long trades placed over the last two days, which was largely influenced by shorts earlier.
The above data shows a momentary shift in traders’ sentiments, which remained largely bearish throughout the month, despite the 25% increase. This reflects the short-term sentiments of the traders, which are towards the bulls at the moment, as the ratio of active buying is greater than that of active selling. Other than this, the Open Interest (OI) rise may also be considered a prime reason for the breakout.
The OI is the total number of outstanding BTC futures or options contracts in the market. It increases when a trader enters into a new contract. The OI is close to the 2021 high of $23.81 billion, with levels hovering around $23.55 billion. Hence, indicating the mounting bullish sentiments among the traders. Besides, the BTC price had marked the highs of the bull market then and currently appears to have more room to thrive. Therefore, a new ATH could be imminent before the Bitcoin Halving.
Lastly, the rising spot in Bitcoin ETF net flows has fueled the rally. The previous day’s figures were record-breaking above $515 million, which adds to the bullish market sentiments. With this, the Bitcoin price cycle appears to have entered the ‘Hope’ phase, which will be followed by huge optimism. Hence, the upcoming price action could be largely bullish, with little or no room for the bears to prosper.
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