Bitcoin hit a new all-time high of $81,800 this morning, ending the week up more than $14,000. This impressive rally is fueled by several factors that are driving the current crypto market rally.
Short Squeeze and Longs Rise
The cryptocurrency market has been on a strong growth trajectory over the past 24 hours, driven by a massive short squeeze. More than $624 million has been wiped out, prompting highly leveraged traders to open long positions on Bitcoin and altcoins. This has created favorable conditions for the bullish trend to continue, as many traders are looking to maintain growth, fearing they will miss out on profits.
Interest from institutional investors
Institutional players are also showing strong interest in cryptocurrencies, especially as Bitcoin has surged. With gold and stock indices hitting important resistance levels, investors are looking for more profitable assets. Bitcoin ETFs have seen net inflows of $7.2 billion over the past five weeks, while Ethereum ETFs have attracted a record $154 million in a week, highlighting the interest in the cryptocurrency market.
Political and economic factors
After the US elections, the victory of cryptocurrency supporters led by President-elect Donald Trump gave the market an additional boost. A bill may soon be passed that provides for the purchase of a million bitcoins to strengthen the economy in the face of growing national debt.
In addition, the quarter percent interest rate cuts by the US Federal Reserve and the Bank of England are helping to boost short-term economic growth. At the same time, China has launched a $1.4 trillion economic stimulus program, which could help increase global liquidity. All of this creates a favorable environment for cryptocurrencies to further strengthen their position in the global market.
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