Why is the crypto market up today?

The cryptocurrency market is up today, following a bullish performance from US equities markets and increasing traders’ demand for crypto investment products. The entire crypto market jumped on Oct. 15 as investors shrugged off mixed responses to China’s stimulus package, and a recovery in US equities appeared to rekindle “October” hopes. The total crypto market capitalization has risen by approximately 2.2% in the last 24 hours to reach $2.3 trillion. The rise in market cap includes gains from Bitcoin BTC  $67,134 and Ether BTC  $67,134, which have risen around 2.5% and 3.8%, respectively.

Risk-on sentiment pushed the crypto market up

Today’s rally mirrors the strength witnessed in US equities. The S&P 500 hit a new all-time high at 5,871.41 on Oct. 14, and it’s up approximately 2.6% month-to-date. This performance highlights the impact of the surge in the valuation of the largest companies listed on stock exchanges in the United States. “The S&P 500 is up +43% since October 2023 and set to post one of its best 12-month gains in history,” declared capital markets commentator The Kobeissi Letter in an Oct. 14 post on X.

The return of excitement around tech and artificial intelligence saw Nvidia stock price hit a new all-time high on Oct. 14, lifting its market value to $3.39 trillion. This is likely to propel tokens in the AI sector and other cryptocurrencies too. Meanwhile, market participants still have their focus on the US Federal Reserve’s decision following a two-day Federal Open Market Committee (FOMC) meeting scheduled for Nov. 6 and Nov. 7.

The US central bank is expected to continue cutting rates on Nov. 7, but it may not be as aggressive as the 50 basis point cut it began with on Sept. 18. According to data from CME Group’s Fed Watch Tool, the odds of a 0.5% rate cut at the Nov. 7 FOMC meeting have reduced to 0% at the time of writing, against an 87% expectation of a 0.25% rate cut and 13% possibility of rates remaining unchanged.

Spot Bitcoin ETF inflows boost the crypto market

The market recovery indicates an increase in bullish sentiment among spot Bitcoin exchange-traded fund (ETF) traders and investors.  During the week ending October 11, spot Bitcoin ETFs headquartered in the United States received a net inflow of $348.5 million. The trend continued this week, with ETFs receiving $555.9 million in inflows on Monday, October 14, increasing the net ETF reserves to $19.4 billion.

Additional data from Coin Shares showed increased institutional demand for crypto investments, which saw $407 million in inflows during the Oct. 7 to Oct. 11 week. 

The inflows coincide with accelerated short liquidations across derivatives markets over the last 24 hours. Data from Coin Glass reveals that short traders—those betting on the crypto market’s downside—have witnessed a total of $136.2 million in liquidations in the last 24 hours. In comparison, long traders suffered over $46.5 million in liquidations in the same period. The data also showed that Bitcoin (BTC) liquidations reached $53 million, with over $46.2 million worth of leveraged short BTC positions liquidated.

Strengthening market structure hints at more gains

Technically, TOTAL the crypto market capitalization of all cryptocurrencies trades under a dominating bull flag pattern, indicating that the rally will continue. The rally above $2.29 trillion on Sept. 27, followed by a sharp drop toward $2.24 trillion and a subsequent return to the $2.02 trillion level on Oct. 3, led to the formation of a bull fag.  BTC bulls face resistance from the flag’s upper boundary at $2.23 trillion, also the 200-day simple moving average (SMA). A daily candlestick close above this level would signal a possible breakout from the chart formation, clearing the path toward the March 14 high of $2.72 trillion.

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