A wave of crypto optimism swept markets over the past 24 hours, lifting Bitcoin (BTC) towards USD 70,000 and Ethereum (ETH) surpassing the all-important USD 2,000 psychological threshold. The broad-based rally, which saw altcoins like Ripple (XRP) and Solana (SOL) advance up to 8%, benefited from the USD 257 million of inflow into spot Bitcoin exchange-traded funds (ETFs) yesterday, the largest single-day inflow into ETFs since January of this year.
What’s Fueling the Sudden Crypto Optimism
The basis for increased confidence in crypto is not from thin air but rather macro and market conditions that are changing positively. Analysts cite robust global risk appetite, strong tech earnings, and stabilisation of bond yields to provide an environment or landscape where assets that are more sensitive to the liquidity cycle can perform well.
Liquidations (image above) of more than USD 450 million from short positions pushed bears, who were positioned against the USD 62,000 support/base level, into buying pressure as the Coinbase Bitcoin Premium Index turned positive and was viewed to be bullish, reinforcing this crypto optimism.
On the other hand, the recent suit against the trading firm Jane Street, accused of market manipulation and privileged information misuse, also helped relieve the crypto market, as the current price behavior also suggests a relevant change in market dynamics.
Key Levels and What Comes Next
Bitcoin is currently testing its hardest resistance level, between USD 69,000 and USD 72,900. Ideally, a clean break above this will lead to targets near USD 74,000; however, if the breakdown occurs, then there will likely be consolidation at or near USD 66,000, likely for an extended period of time. Ethereum’s next resistance level is between USD 2,100 and USD 2,220 (in price action).
A significant factor will be the USD 10.5 billion monthly options expiry for Bitcoin on Friday. To add a bit more pressure, there should be continued institutional inflow and the ability to absorb any overhanging supply to ensure longevity for this market.
