Markets
Why is the crypto market rising today? Is this the start of a new rally?
The crypto market surged over the past 24 hours to around $2.75 trillion on Tuesday during the Asian session. Ethereum (ETH) remained at the epicenter of the recent crypto rebound, rising 20% to around $3,699. The ETH/BTC pair has climbed more than 13% in the past 24 hours, accelerating the cryptocurrency rotation from Bitcoin.
Additionally, Bitcoin dominance has signaled an inevitable near-term reversal via bearish divergence on the Relative Strength Index (RSI).
Top reasons why crypto is up today
Spot Ether ETF Approval Frenzy
The crypto industry has reacted to news that the U.S. Securities and Exchange Commission (SEC) may be preparing to approve Ether spot ETFs. From a political perspective, the Biden administration has dramatically changed its views on crypto after former President Donald Trump gained significant attention by endorsing the crypto industry ahead of this year’s election.
According to market experts, the approval of spot Ether ETFs in the United States will signal the adoption of the entire altcoin sector, thus acting as a major bullish trigger.
Short Compression Scenario
Like Bitcoin and Ethereum Price trading below $60,000 and $3,000 respectively in the recent past, most crypto derivatives traders were predicting another correction. However, the current crypto rally, which has resulted in the liquidation of over $350 million, has turned most short traders into buyers, thereby triggering a short squeeze.
Improved regulatory reach
The US Congress has accelerated its efforts to regulate the cryptocurrency sector in recent months, leading up to the November election. In India, the government is moving towards the inevitable adoption of cryptocurrencies 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 also: Top Altcoin Set to Outperform This Week as Crypto Bull Run Begins