Markets
Why is the crypto market booming today? Is this the start of a new rally?
The crypto market rose in the last 24 hours to around $2.75 trillion on Tuesday during the Asian session. Ethereum (ETH) remained at the epicenter of the recent crypto rally with a 20% rise to around $3,699. The ETH/BTC pair has soared more than 13% in the last 24 hours, thus accelerating Bitcoin’s crypto money rotation.
Furthermore, Bitcoin’s dominance signaled an inevitable near-term reversal via a bearish divergence in the Relative Strength Index (RSI).
Top Reasons Why Crypto Soared Today
Spot Ether ETF approval frenzy
The crypto industry has reacted to news that the United States Securities and Exchange Commission (SEC) could be preparing to approve spot Ether ETFs. From a political perspective, the Biden administration has drastically changed its view on crypto after former President Donald Trump attracted significant attention by endorsing the crypto industry ahead of this year’s elections.
According to market experts, the approval of spot Ether ETFs in the United States will signal industry-wide adoption of altcoins, thus acting as an important bullish trigger.
Short squeeze scenario
Like Bitcoin and Ethereum Prices trading below $60K and $3K respectively in the recent past, most crypto derivatives traders have predicted a further correction. However, the ongoing rally in crypto, which resulted in the liquidation of over $350 million, turned most short traders into buyers, thus triggering a sell-off squeeze.
Enhanced regulatory scope
The US Congress accelerated its efforts to regulate the cryptocurrency industry in the final months before the November elections. In India, the government has been moving towards the inevitable adoption of cryptocurrency and regulations similar to those in Europe and its MiCA framework.
As a result, more institutional investors are willing to enter the crypto space due to clear regulatory frameworks.
Read too: Top Altcoin Set to Outperform This Week as Crypto Bull Run Begins