5 Reasons Why Crypto Prices Are Surging Today?

7Ary...USep

4 May 2024

The crypto market has gianed traction, with a resurgence in the crypto prices, due to ETF flows, Hong Kong ETF approval, pension plans' interest, and other related factors.

HIGHLIGHTS

The crypto prices have surged today, gaining attention from the investors.
A flurry of factors have boosted the crypto prices, boosting investors' confidence.
Here we explore five potential reasons behind the recent resurgence in the crypto prices.

The crypto market has witnessed a notable rebound recently, as witnessed by the surge in the major prices. In addition, the soaring crypto prices also reflect a growing confidence of investors towards the digital asset sector. Notably, it has also sparked discussions among investors over a potential reason behind the surging prices today.
So, let’s quickly take a tour of the potential reasons that may have helped gains in the crypto market.

Why The Crypto Prices Are Rising?

Although there could be a flurry of reasons behind the recent surge in crypto prices, let’s explore the top five reasons behind it.

Recent Cooling Economic Data

The recent economic data seems to have boosted the confidence of the market participants. Meanwhile, the hawkish stance of the Federal Reserve has weighed on the investors’ sentiment lately, as witnessed by the declining confidence in the broader financial market, let alone the crypto sector.
However, despite the hawkish stance and concerns over inflation, the recent economic data seems to have boosted the investors’ confidence. Notably, the recent surge in crypto prices can be attributed to a mixed bag of economic data. While the Manufacturing PMI fell slightly short of expectations at 49.2%, indicating a slowdown in manufacturing activity, the March Job Openings remained robust at 8.5 million, though slightly below forecasts.
In addition, the U.S. employment report showed an increase of 175,000 jobs, lower than the anticipated 240,000, and a slight rise in the unemployment rate to 3.9%. On the other hand, hourly wages only saw a 0.2% increase, compared to the expected 0.3%.
Despite these mixed signals, investors found solace in the overall stability of the labor market and the manufacturing sector, suggesting that the economy continues to recover from pandemic-induced challenges. Besides, this optimism spilled over into the crypto market, driving prices higher as investors sought alternative assets amid uncertain economic conditions.

Bitcoin ETF Flows

The Bitcoin ETF has witnessed tumultuous trading lately, noting significant outflows in recent days. Notably, on the first day of May, the U.S. Spot Bitcoin ETF noted an outflow of $563.7 million, which has dampened the sentiment of the market participants.
However, recent data suggests that the U.S. Spot Bitcoin ETF sector is regaining its momentum. According to Farside Investors data, the U.S. Spot Bitcoin outflow has cooled to $34.4 million on May 2, after that massive outflux on May 1. In addition, the data also showed that on May 3, the Bitcoin ETFs noted an influx of $378.3 million, further bolstering investors’ sentiment.
Also Read: What’s Happening With Shiba Inu Price? Huge Gains Coming

Hong Kong ETF

The recent approval of the Bitcoin and Ethereum ETF in Hong Kong has fueled the positive momentum in the crypto market today. Notably, in a landmark development for the cryptocurrency sphere, Hong Kong’s introduction of Bitcoin Exchange-Traded Funds (ETFs) has sparked a surge in crypto prices.
Within just one week of trading, these ETFs, including the Huaxia, Harvest International, and Boshi Bitcoin ETFs, have collectively amassed a staggering $258 million worth of Bitcoin. This rapid acquisition of cryptocurrency, amounting to 4,218 BTC within three days of listing, highlights the growing interest among Hong Kong investors in digital assets like Bitcoin.
The debut of these ETFs coincided with the launch of Ethereum-focused offerings in the region, creating a dynamic trading environment for cryptocurrencies. Market sentiment soared as investors expressed optimism, with many foreseeing the potential for these ETFs to surpass the milestones set by the $125 million US Bitcoin ETF launch.
Meanwhile, this enthusiastic response underscores the increasing acceptance and integration of digital assets into mainstream financial markets in Hong Kong. The remarkable success of these ETFs marks a significant stride forward in the region’s adoption of cryptocurrencies, signaling a new era of investment opportunities and financial innovation.

Pension Plans Boost Sentiment

The recent surge in crypto prices could be attributed to pension plans’ growing interest in crypto assets. Fidelity Digital Assets’ report reveals discussions among pension funds about investing in cryptocurrencies, signaling a shift in institutional investment strategy.
Meanwhile, Manuel Nordeste, VP at Fidelity Digital Assets, highlighted this trend during an event in London, noting increased interest from family offices and high-net-worth individuals. Initially targeted by Fidelity in 2018, these investors are now joined by larger institutional investors and corporates.
Despite this, Fidelity’s survey indicates a disparity in adoption rates, with 80% of high-net individuals favoring crypto compared to only 23% of pension plans. In addition, while nearly half of individuals have invested in digital assets, only a small fraction of pension plans, about 7%, have ventured into the crypto market.
Notably, this growing attention from institutional investors, particularly pension funds, suggests a significant shift in perception towards cryptocurrencies and may continue to drive the upward momentum in crypto prices.

Buy The Dip

Investors are seizing the recent dip in the crypto market as a prime buying opportunity, attributing the downturn to the impact of the Bitcoin Halving event. The Bitcoin Halving, a scheduled reduction in the reward miners receive for validating transactions, occurs approximately every four years. This event is often associated with heightened volatility and price fluctuations in the cryptocurrency market.
However, many investors perceive the dip in crypto prices as a temporary setback amidst the broader upward trajectory of the market. The concept of “buying the dip” refers to purchasing assets when their prices decline, with the anticipation of future price appreciation.
Meanwhile, the sentiment among investors is buoyed by the historical performance of cryptocurrencies post-halving events, where prices have typically surged in the months following the reduction in mining rewards. This historical trend, coupled with growing institutional interest and adoption of cryptocurrencies, has instilled confidence in the long-term potential of digital assets.

Bottom Line:

The recent resurgence in the crypto market could be attributed to the above-mentioned reasons. Notably, as of writing, the global crypto market rose 5.16% to $2.33 trillion, while its market volume rose 4.34% to $73.79 billion.
Simultaneously, the Bitcoin price surged 6.37% to $63,133.93, while its trading volume rose 9.71% to $32.52 billion. On the other hand, the Ethereum price soared 4.25% to $3,103.92 at the same time.

Will Bitcoin Hit $70,000 again? Here’s What You Need to Know

Will Bitcoin hit $70,000 again? Delve into market analysis, sentiment shifts, and price forecasts as Bitcoin navigates key support levels and faces resistance on its journey toward the elusive $70,000 mark.

HIGHLIGHTS

Bitcoin's recent performance prompts analysis of its potential to reach $70,000 amidst market volatility.
Market sentiment shifts as Bitcoin bulls attempt to regain momentum above the $60,000 level.
Factors including historical accumulation trends and liquidation charts inform Bitcoin's price forecast, with key resistance levels and profit-taking considerations influencing its journey toward $70,000.

Bitcoin’s recent performance has been marked by significant volatility, with the cryptocurrency testing support levels at $56,500. This testing of support has prompted discussions regarding Bitcoin’s potential to reach the $70,000 price target. A crucial event impacting Bitcoin’s market dynamics was the recent bitcoin halving, which occurred on May 20. This marked the third halving cycle for Bitcoin and resulted in a reduction of miner rewards from 6.25 BTC to 3.125 BTC. This adjustment has immediate implications for the supply and demand dynamics within the Bitcoin market, as it affects the rate at which new Bitcoins are introduced into circulation.

Market Sentiment and Potential Catalysts

Despite prevailing bearish sentiment, Bitcoin bulls are actively working to regain momentum by pushing the price above the psychologically significant level of $60,000. Notably, veteran trader Peter Brandt has highlighted the possibility of a typical bull market continuation pattern if Bitcoin maintains recent lows and continues its upward trajectory. In tandem with these we can see the Open Interest of Bitcoin Surge over 6.45% with a valuation of $16.5 Billion. The RSI which signals a bear projection is at 67.12 thereby correlating with recent Bitcoin Price increase of 6.29%, trading at $63,289.
Additionally, market participants are closely monitoring spot Bitcoin exchange-traded funds (ETFs), which recently witnessed significant outflows amounting to $563 million on May 1. However, sentiment may shift if Bitcoin ETFs begin to experience consecutive days of net inflows. Former BitMEX CEO Arthur Hayes has expressed optimism, suggesting that the recent sell-off may have concluded, potentially signaling a resumption of upward movement in the cryptocurrency markets.
Also Read: Crypto Prices Today May 4: Bitcoin Rallies Past $63K As ETF Inflows Regain Momentum

Bitcoin Price Forecast and Key Considerations

In analyzing potential price movements, attention is drawn to liquidation charts, which indicate the possibility of significant liquidations exceeding $1.19 billion if the BTC price surpasses certain critical levels.
However, a closer examination of historical accumulation trends, as highlighted by IntoTheBlock’s in/out of the money chart, provides further insights. This chart identifies a historical accumulation zone between $61,770 and $63,583, indicating a notable number of addresses acquiring BTC within this price range.
This accumulation suggests underlying support for Bitcoin’s price at these levels. Nevertheless, failure to overcome resistance could lead to price declines toward $55,500. The current BTC price forecast suggests a potential recovery toward $70,000, with further upward movement supported by the Relative Strength Index (RSI) showing renewed bullish momentum. However, caution is advised, as profit-taking may occur at key levels such as $66,000 and $68,000, potentially dampening the upward momentum toward the ultimate target of $70,000.
Also Read: Grayscale Bitcoin ETF Ends 77-Days of Outflows, GBTC Inflows Begin