In a significant market rebound, the cryptocurrency market capitalization has seen a sharp increase, recovering a substantial part of its prior losses. The market value soared 13% to $2.498 trillion, up from a recent low of $2.208 trillion. Bitcoin and Ethereum led the charge with impressive gains of around 12.5% and 16.5%, respectively.
Enthusiasm Ahead of Bitcoin Halving
The resurgence is largely attributed to the anticipation surrounding the Bitcoin halving event, which has historically propelled the market. Despite a 17.5% pullback in Bitcoin’s value and slowing inflows into spot exchange-traded funds, the overall sentiment remains bullish about Bitcoin’s price trajectory surrounding the halving.
Investment firm Primitive Ventures’ founder Dovey Wan views the current price trend as part of a typical three-stage cycle seen around previous halving events, which usually involves a correction before a substantial rally.
Short Positions Face Squeeze in Futures Market
The heightened market volatility has also had a significant impact on the futures market, with a surge in short position liquidations totaling close to $180 million in a single day. Bitcoin short positions bore the brunt of the liquidations, at $65.50 million, and Ethereum followed closely with $47.38 million.
Notwithstanding the challenges for short-sellers, data from the trading analysis platform Coinalyze reflects an increasing open interest in crypto futures. This suggests growing market participation and a positive shift in investor sentiment, as open interest hints at the total value of outstanding futures contracts in the market.