Key drivers behind the surge in the cryptocurrency market today include optimism regarding US-China trade relations, a significant short squeeze causing $624 million in liquidations in 24 hours, and a bullish technical breakthrough. Bitcoin and Ether saw substantial gains, contributing to a total market capitalisation increase of 6.7% to $2.94 trillion. This rally is underpinned by both fundamental news and positive technical signals.
The recent spike in the cryptocurrency market can be attributed to several critical factors. First, optimism surrounding the easing of US-China trade tensions has spurred investor confidence. Notably, statements from US Treasury Secretary Scott Bessent and President Trump hinted at a potential relaxation of tariffs, contributing to this positive sentiment.
Moreover, the market has experienced a significant short squeeze, resulting in over $624 million in liquidated positions, with approximately $545 million originating from short positions. This has been underscored by strong liquidity events reminiscent of previous market surges, amplifying the momentum, particularly for Bitcoin, which surpassed $94,000.
In conjunction with these news dynamics, technical indicators have validated a bullish market outlook. A breakout from a multimonth downtrend, characterised by a falling wedge pattern, occurred following a retest of the resistance line at $2.6 trillion. With a current market capitalisation of $2.94 trillion and bullish signals emerging from the relative strength index (RSI), the total market is targeting $3.12 trillion, pending the overcoming of key resistance levels.
