Top Reasons Why the Crypto Market is Up Today?

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The cryptocurrency market has witnessed a substantial comeback, led by Bitcoin, the pioneering cryptocurrency, surpassing the $51,500 mark, and achieving a remarkable $1 trillion in market cap.

This is the first time Bitcoin has reached such levels since 2021. The last time it did, back in December 2021, it faced a major drop of $16,000 by the end of 2022. As the cryptocurrency market witnesses this resurgence, various factors contribute to the recent rally in Bitcoin and other cryptocurrency prices.

Record-Breaking Inflows into ETFs

Bitcoin’s recent surge is attributed to substantial inflows into Spot Bitcoin ETFs, with a remarkable $631 million recorded on February 13 alone. 

BlackRock’s iShares Bitcoin ETF (IBIT) led the way with a staggering $493 million inflow, surpassing its competitors by a wide margin. Fidelity recorded the second-best inflows at $163 million.

Meanwhile, GBTC outflows have slowed down, staying under $100 million over the past 3 days this week. Net inflows into Bitcoin ETFs now total $3.7 billion, with BlackRock witnessing $4.6 billion in net inflows and GBTC experiencing $6.5 billion in net outflows.

Fed Rate Cut Hopes

However, yesterday’s price drop in Bitcoin aligned with the awaited U.S. Consumer Price Index (CPI) report. Projections point to a 3.7% increase in January’s core CPI, marking the smallest annual gain since April 2021. Additionally, the overall CPI is expected to rise by less than 3% for the first time in two years.

These indicators suggest the Federal Reserve’s successful anti-inflation efforts, potentially setting the stage for future interest rate cuts

Upcoming Halving

Meanwhile, investors are closely monitoring the upcoming Halving scheduled for April, a historical catalyst for substantial price rallies. This strategic event, intended to reduce the rate of Bitcoin’s supply, holds the potential to reignite a surge in its value.

Increased Bitcoin options bets

Deribit, a crypto derivatives exchange, has reported a significant increase in open Bitcoin call options at strike prices of $60,000, $65,000, and $75,000, as the expiry date on February 23 draws near.

With these factors contributing to the prevailing bullish sentiment, investors maintain cautious optimism about the future paths of both Bitcoin and Ethereum prices

What Next for Bitcoin?

Bitcoin has experienced a notable 20% surge in the last 7 days, breaking the $51,500 mark and showing a 2.72% increase within the past 24 hours.

As the cryptocurrency continues its upward trajectory, some experts foresee Bitcoin reaching the $55,000 mark in the upcoming days. The bullish sentiment in the market suggests potential further gains for the leading cryptocurrency.