The crypto market rose 2.4% to $2.51 trillion on Friday mainly due to a shift in global risk sentiment following signs of a possible crackdown in the Middle East.
Summary
- Crypto prices rebounded on Friday after crude oil prices fell following multi-year highs.
- A wave of short selling across active markets and back-to-back inflows into major crypto ETFs also supported the gains.
Bitcoin (BTC), the leading crypto asset by market cap, rallied nearly 4%, reaching the 72,000 mark. Ethereum (ETH) is up 4.3% over the past day, trading at $2,100 at the time of writing. Other major crypto assets, such as BNB (BNB), XRP (XRP), Solana (SOL), and Dogecoin (DOGE), also posted small gains on the day.
It should be noted that today’s market rally was an independent event as it emerged from both US common stock indexes and technology stocks. The Dow Jones Industrial Average fell 739 points or 1.56% in US trading hours, while tech heavyweights like the S&P 500 and Nasdaq-100 fell 103 and 431 points, respectively.
The crypto market strengthened as investors’ risk sentiment improved after oil prices fell sharply around the world. Notably, Brent crude oil fell more than 7% today, allaying immediate inflation fears and providing a favorable environment for digital assets.
Short completions are increasing
As crypto prices rise, they catch short sellers, causing the liquidation of these very high positions. Data from CoinGlass shows that approximately $246 million was removed from the active markets, most of which came from short positions.
The total open capital of the crypto market also increased by 5.2% on Friday, indicating that investors are pouring new money into the market.
ETF income and Coinbase premium
Inflows into Spot ETF products have also supported recent gains. According to data from SoSoValue, on Thursday, $53.87 entered Bitcoin ETFs, marking the fourth straight day of income for these funds. The same trend was seen in all of their Ethereum counterparts, who posted three days of backlogs.
At the same time, the Coinbase Premium has also risen significantly in the past 24 hours, indicating that US institutions are paying a premium over international rates to protect Bitcoin. Traders often view this as a strong signal that institutional “smart money” is leading the current market’s charge.
Crypto market rallied following Trump’s latest comments
Crypto prices also benefited after US President Donald Trump recently hinted that the ongoing war between the two countries may be coming to an end.
This seems to have eased investors’ fears of a protracted war, which has rekindled risk-off sentiment among investors who have begun shifting money from safe havens back to riskier assets like crypto.
Disclosure: This article does not constitute investment advice. The content and materials presented on this page are for educational purposes only.
