Bitcoin frenzy sweeps the market! Overnight, 85,000 people were liquidated due to the plunge, and the Fed's statement further exacerbated market volatility. What happened? Since last night, Bitcoin has soared like a runaway rocket, breaking through the $71,000 mark in one fell swoop! At the same time, Ethereum also showed an amazing rise, with an increase of nearly 20%, and the price soared to about $3,700. Other altcoins followed closely, especially mainstream concept coins such as LDO, OP, ARB, UNI and ENS under the Ethereum ecosystem, all of which rose by more than double digits. The strong performance of these currencies is undoubtedly due to the strength of Ethereum.

So why is the cryptocurrency market suddenly so crazy? After in-depth analysis, we found three key factors. First, there was a major change on the supply side. On May 20, the Venezuelan government suddenly announced a ban on cryptocurrency mining due to excessive electricity demand, which led them to cut off the connection of all Bitcoin mines to the power grid and seized more than 11,000 Bitcoin mining machines. This move caused a sharp drop in market supply, while demand continued to be strong. The net assets of Hong Kong ETFs soared by $244 million, while US ETFs accumulated more than 14,000 bitcoins in the past week.

Secondly, the severe decline in the credit of the US dollar is also an important factor driving the rise of cryptocurrencies. Recently, spot gold has continued to rise strongly, and Bitcoin, as "digital gold", has naturally been sought after by the market. Although the US dollar index remains high, physical assets such as gold are rising. Although the market's pull-up this time was unexpected, it is reasonable after careful analysis. After all, the US CPI inflation data in April was in line with expectations, further raising market expectations for interest rate cuts. Once the interest rate is cut, liquidity will be released, which will undoubtedly be a major positive for the crypto market.

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