Why the Crypto Market Was Down Before and Suddenly Rallied Yesterday
Here are the key reasons behind the recent surge in the crypto market, especially Bitcoin:
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📈 1. Institutional Investment & ETFs Driving Momentum
Crypto funds saw record inflows of over $16.7 billion in May alone.
Over $5.5 billion went specifically into Bitcoin funds.
Spot Bitcoin ETFs from firms like BlackRock (iShares) and Fidelity continue attracting heavy investment.
BlackRock’s IBIT alone added $300 million in a few days.
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💰 2. High Stablecoin Supply = Market Liquidity
The total supply of stablecoins has reached a 2-year high of $263 billion, signaling available liquidity likely to enter crypto assets.
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🌍 3. Macro & Technical Factors
Global optimism due to easing US-European trade tensions.
A weakening US Dollar has driven investors toward alternative assets like Bitcoin.
Bitcoin has crossed important technical levels (EMA, resistance zones) triggering bullish trading patterns.
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🏛 4. Political & Regulatory Optimism
Trump’s administration has shown a pro-crypto stance, including plans to hold a “Strategic Bitcoin Reserve.”
Hints at softer SEC regulations have restored investor confidence in crypto markets.
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🧠 5. Strategic Corporate Purchases
MicroStrategy (Michael Saylor’s firm) bought around 4,000 Bitcoins, now holding over 580,000 BTC (≈2.7% of total supply).
Many public and private firms are adding crypto to their balance sheets.
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💥 6. Short Squeeze in the Futures Market
Over $495 million worth of short positions were liquidated, causing rapid price movement upward (a typical short squeeze effect).
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📊 Summary Table
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📅 Current Status & Outlook
Bitcoin recently broke above $108k–$110k. If it stays above $110k, it could test $112k–$115k or even $120k.
Strong support lies near $104k–$106k, where minor corrections might occur.