Bitcoin (BTC) experienced a price surge, reaching over $71,000, marking its highest level since early April.
The rally was fueled by robust inflows into exchange-traded funds (ETFs) and a general bullish sentiment in the cryptocurrency market. The sharp increase in Bitcoin’s price was accompanied by substantial gains in other major cryptocurrencies, including Ethereum (ETH).
Ethereum Soars 22%, Boosted by ETF Approval Hopes
Ethereum (ETH) also saw a price increase, soaring over 22% to surpass the $3,600 mark, trading at $3,770. This surge was further propelled by the growing expectations of an Ether ETF approval in the U.S. Bloomberg analysts Eric Balchunas and James Seyffart raised the probability of this approval to 75%, significantly higher than their previous estimate.
Update: @JSeyff and I are increasing our odds of spot Ether ETF approval to 75% (up from 25%), hearing chatter this afternoon that SEC could be doing a 180 on this (increasingly political issue), so now everyone scrambling (like us everyone else assumed they'd be denied). See… https://t.co/gcxgYHz3om
— Eric Balchunas (@EricBalchunas) May 20, 2024
The anticipation of an Ether ETF approval has been a major driver of market optimism. Analysts suggest that such an approval could open the doors to substantial institutional investment in Ethereum, similar to the impact seen with Bitcoin ETFs. The spot Bitcoin ETF, which began trading in January, has already accumulated $12 billion in total inflows, attracting interest from top trading firms and state funds.
Market Reactions and Short Liquidations
The rally in cryptocurrency prices led to market reactions, particularly among traders who had taken short positions. Short positions are bets against higher price movements, and when prices rise sharply, these positions can incur substantial losses.
According to Coinglass data, the sudden price movements resulted in over $260 million in short liquidations.
Binance recorded the highest amount of liquidations, totaling over $130 million, followed by OKX with $118 million and Huobi with $51 million. Ether shorts suffered the most, with losses exceeding $115 million, reflecting the sharp price increase of Ethereum. The forced closure of these leveraged positions indicates the volatility and risk associated with trading in the cryptocurrency markets.
Optimism Surrounding Ether ETF Approval
The raised odds of an Ether ETF approval have contributed significantly to the bullish sentiment in the market. The U.S. Securities and Exchange Commission (SEC) has reportedly asked aspiring Ether ETF exchanges to update their 19b-4 filings ahead of a key deadline, further fueling speculation about an imminent approval. Market participants view the potential approval of an Ether ETF as a major positive development that is likely to attract substantial institutional capital.
QCP Capital, a Singapore-based trading firm, expressed the view that the approval of a spot Ether ETF could push Ether prices closer to $4,000, while a denial could see prices drop back to $3,000. The firm highlighted the accelerated updates to 19b-4 filings as a strong indicator that approval might be forthcoming.
Beyond Bitcoin and Ethereum, other major cryptocurrencies also registered gains amid the overall bullish market sentiment. XRP, Cardano (ADA), Solana (SOL), and Dogecoin (DOGE) all saw price increases ranging from 3% to 6%, according to CoinGecko data. These gains, although smaller than those of Bitcoin and Ethereum, reflect the positive momentum across the broader cryptocurrency market.
The post Crypto Market Rally: Bitcoin Hits $71K and Ethereum Soars on ETF News appeared first on Coinfomania.
