Why Ethereum, Bitcoin, and Dogecoin Rallyed Today

Several major cryptocurrencies started the week on strong gains today amid a confluence of positive catalysts including potential selling pressure, technical trading tailwinds, and perhaps most surprisingly, geopolitical tailwinds from major Chinese money management firms.

When all is said and done, at the close of the regular session on Monday. Ethereum (ETH 7.17%) It rose 9.1%, bitcoin (BTC 1.97%) It rose 3.8%, Dogecoin (viceroy -0.93%) It made a profit of just over 2%.

Possibility of cryptocurrency short selling, technical tailwind

According to Coinglass data this morning, digital asset markets have recorded more than $176 million in liquidations in the last 24 hours, with the majority (about $124 million, or 72%) of open sell positions. It came out of clearing.

The price rebound of major cryptocurrencies in recent weeks has been driven by several factors, including large inflows into Bitcoin ETFs, the upcoming Bitcoin halving event, and expectations of the possible approval of the first physical Ethereum exchange-traded fund (ETF). It worked in combination. ) – It appears that short sellers have virtually no choice but to liquidate their bearish positions. The resulting surge in buying demand can create so-called selling pressure, driving digital asset prices higher in the process.

Meanwhile, technical trading patterns can also play an important role. According to TechDev, a widely respected Bitcoin analyst on social media platform Integrate beyond key technology levels Historically, the trading average ahead of significant rallies for the world’s most popular cryptocurrencies.

Is China Entering 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 applications for their own spot Bitcoin ETFs through their Hong Kong subsidiaries. It was reported that . The application is currently awaiting regulatory approval.

This news is especially important considering China’s previous public hostility toward Bitcoin. In 2021, China’s top regulator banned cryptocurrency trading and even mining, causing the price of Bitcoin to plummet at the time. However, in recent years it has become clear that China’s cryptocurrency ban is not absolute and that cryptocurrency trading and mining continues to thrive in the country. If China actually softens its stance, it would serve as the latest important validation of the global adoption of Bitcoin and other cryptocurrencies.

The U.S. Securities and Exchange Commission (SEC) approved the world’s first 13 Bitcoin ETFs in January 2024. This historic approval served as perhaps the most visible validation that cryptocurrencies are a legitimate investment asset class. ETFs are a much more accessible investment vehicle for anyone because they can be bought and sold throughout the regular trading day through almost any online brokerage, unlike requiring investors to open a separate cryptocurrency trading account with a cryptocurrency specialist firm. You are considering making cryptocurrency a meaningful part of your portfolio.

Bitcoin ETFs have experienced massive inflows since then. For example, at the end of last month ARK 21 shares Bitcoin ETF. (NYSEMKT: ARKB) It registered net inflows of over $200 million, making it the third Bitcoin ETF in the U.S. to surpass $200 million this year.

For perspective, China’s Harvest Fund and Southern Fund manage over $230 billion and $280 billion in total assets, respectively. Therefore, if the Bitcoin ETF application passes regulatory muster through its Hong Kong subsidiary and the mainland Chinese government continues to choose a more cautious approach through indirect approval, this could represent a large-scale positive shift towards cryptocurrency adoption in the long term. The world’s second largest economy.

However, there is no guarantee that Bitcoin, Ethereum, and Dogecoin will continue this incredible rally indefinitely. However, as cryptocurrencies in general continue to enjoy greater adoption globally, it is no surprise that the prices of the most popular digital assets continue to reach new highs.