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 (Crypto: ETH) Increased by 9.1% Bitcoin (Cryptocurrency: BTC) 3.8% increase; dogecoin (Code:Doge) It rose by over 2%.
Possibility of virtual currency short squeeze and technical tailwinds
according to coin glass data Over $176 million was traded in the digital asset market this morning. liquidation In the past 24 hours, the majority of that amount (approximately $124 million, or 72%) was due to the liquidation of open short positions.
Prices of the major cryptocurrencies have been rising in recent weeks, spurred by a combination of factors including strong inflows into Bitcoin ETFs, which could lead to a Bitcoin halving event, and hopes that the first spot Ethereum exchange-traded fund (ETF) could be approved—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 as follows: 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, and crypto trading and mining reportedly continues to thrive in China. If China is indeed softening its stance, it could only serve as the latest significant test 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 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, so anyone can buy and sell ETFs. It’s a much more accessible investment vehicle. 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 reference, 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 may indicate positive change. 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.
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Steve Symington has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has Disclosure policy.
Why Ethereum, Bitcoin and Dogecoin rose today Originally published by The Motley Fool