Crypto Market Turns Green Following Ethereum Futures ETF Approval and Dollar Weakness
The cryptocurrency market experienced a positive surge on Friday, with several major cryptocurrencies making notable gains:
- Bitcoin (BTC): Bitcoin saw a 2.4% increase in the past 24 hours, pushing its price above $27,000.
- Ethereum (ETH): Ethereum recorded a 3.3% increase, reclaiming support above $1,650.
Several factors contributed to this bullish momentum:
- Ethereum Futures ETF: The announcement of an Ethereum futures exchange-traded fund (ETF) by VanEck fueled optimism in the market.
- S&P 500 Rise: A 2% rise in the S&P 500 index provided additional positive sentiment.
- Short Liquidations: Approximately $80 million in short liquidations occurred within the last 24 hours, adding to buying pressure.
- The U.S. stock market also turned green, potentially signaling a turnaround after a decline since mid-September.
Additionally, weakness in the value of the U.S. dollar played a role in boosting bullish sentiment. The dollar index (DXY) fell for a second consecutive day, declining by 1.13% from its yearly peak.
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Historically, the dollar has had an inverse correlation with both the stock and crypto markets, especially when the U.S. central bank adjusted benchmark interest rates.
Liquidations of short orders in the futures market, amounting to approximately $80 million, added to the buying pressure. Bitcoin and Ethereum led these liquidations, as reported by a Bitfinex analyst.
As a result of the positive momentum in Bitcoin and Ethereum, the broader cryptocurrency market followed suit. The total crypto market capitalization increased by 2.2% in the past day, adding nearly $25 billion.
Among the top cryptocurrencies by market capitalization, Sui Network (SUI) and PepeCoin (PEPE) stood out with double-digit gains of 12.6% and 10.8%, respectively. ApeCoin (APE), Thorchain (RUNE), and Arbitrum (ARB) also recorded overnight gains ranging from 6% to 8%.
Overall, a combination of positive news, stock market performance, dollar weakness, and short liquidations contributed to the crypto market’s upward movement on this Friday morning.