The cryptocurrency market is trading in the green today, with most tokens posting gains in the last 24 hours.
The recent gains have shifted the market sentiment. Recently, after BTC dropped to a two-month low below $55K, the market plunged into extreme fear. However, the Bitcoin Fear and Greed Index has since recovered to 52, showing that the market is now neutral.
A series of factors have contributed to the recent recovery, with the market expected to continue rebounding.
Crypto Market Rallies As German Government Runs Out of Bitcoin
The German government finished selling off all of its Bitcoin holdings last week. The selling spree caused fear and panic across the cryptocurrency market.
However, the German government’s Bitcoin wallet holds none of the coins seized from Movie2k.to piracy site. Over $3 billion worth of Bitcoin held by this wallet was dumped in the market in under a month, triggering the recent price decline.
According to analyst @DaanCrypto on X, the recent selling pressure by the German government was absorbed by inflows into spot Bitcoin exchange-traded funds (ETFs).
Spot Bitcoin ETF products transcended over $1 billion in inflows last week alone. The volumes prevented the price of Bitcoin from dropping further.
The analyst says things could get “interesting” if similar ETF volumes are seen this week when selling pressure is low. While some buyers that bought the dip might sell, the price should consolidate around the $60K-$62K level.
The recent crypto market rally saw liquidations from Bitcoin hit nearly $50 million in the last 24 hours, according to data from Coinglass.
Global Uncertainty Makes the Case for Bitcoin
Besides the waning selling pressure, global uncertainty is also behind the recent rally across the crypto market.
On Friday, former US President Donald Trump survived an assassination attempt. Trump has emerged as a major advocate for the cryptocurrency industry and is even slated to attend the Bitcoin 2024 conference happening towards the end of July.
According to market analyst @CryptoMichNL, the events created global uncertainty, creating a climate for Bitcoin to make consistent gains.
Bitcoin has often been touted as digital gold and a good financial asset during inflation or market uncertainty.
Besides being used as a hedge, BTC is also amassing popularity because of Trump’s views on how cryptocurrencies should be regulated in the US. With Trump vowing to support crypto businesses if elected, cryptocurrency prices will likely react to this development.
Nevertheless, the Joe Biden administration has vowed to support cryptocurrency businesses, even adopting a pro-Bitcoin and pro-crypto approach.
The US Securities and Exchange Commission (SEC) is expected to give the green light for spot Ether ETFs to launch this week. The market anticipates that the launch will trigger gains across the cryptocurrency market, as seen after the approval of Bitcoin ETFs.
