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Why is the cryptocurrency market active today? Is this the start of a new rally?
The cryptocurrency market has seen a significant increase over the past 24 hours, reaching around $2.75 trillion during Tuesday’s Asian session. Leading this wave was Ethereum (ETH), which jumped 20% to about $3,699. The ETH/BTC pair also rose more than 13%, indicating a strong shift in investments from Bitcoin to Ethereum.
Ethereum’s impressive rise highlights its key role in the recent cryptocurrency recovery. This change has led to a rapid movement of capital within the market, with many investors moving from Bitcoin to Ethereum.
What’s up with Bitcoin?
While everything seems fine with Ethereum, Bitcoin – not so much!
Bitcoin’s market dominance is showing signs of potential decline, indicated by a bearish divergence on the Relative Strength Index (RSI). This technical signal suggests that Bitcoin may soon face further declines.
Key Factors Behind the Cryptocurrency Wave Today
Potential SEC Approval of Ether ETFs
The market was boosted by news that the US Securities and Exchange Commission (SEC) may soon approve spot Ether ETFs. This could represent a major milestone for the broader altcoin market, acting as a strong bullish trigger.
Political changes
Politically, the Biden administration has softened its stance on cryptocurrencies, in contrast to former President Donald Trump’s approach. Trump’s recent support for the cryptocurrency industry has also attracted a lot of attention ahead of this year’s election.
Short squeeze in action?
Recently, Bitcoin and Ethereum they are trading below $60,000 and $3,000 respectively, leading many derivatives traders to expect further declines. However, the market rebound led to the liquidation of over $350 million in short positions, causing many traders to start buying instead, triggering a short squeeze.
Global regulatory developments
The efforts of the United States Congress
The US Congress has been working hard to regulate the cryptocurrency industry, aiming to establish clear guidelines before the November elections. This regulatory clarity is expected to attract more institutional investors.
India’s move towards cryptocurrency regulation
In India, the government is moving towards the adoption and regulation of cryptocurrency, following the European framework for markets in crypto-assets (MiCA). This clearer regulatory environment is encouraging more institutional investors to enter the cryptocurrency market.
Read also: Top Altcoins are set to outperform this week as the Crypto Bull Run begins
Do you think Ethereum will continue to outperform Bitcoin?