Why is the crypto market up today?

Rising speculation of a spot Ether ETF clearance, increased inflows into crypto investment products, and a solid technical setup are some of the triggers driving the crypto market’s current rise. The cryptocurrency market is up today, with the entire market value jumping 6.66% to $2.6 trillion on May 21. At the same time, Bitcoin’s market dominance of $69,824 fell by 1.44% to 52.6%, as a likely spot Ethereum ETF approval and bullish market structure enBitcoin and Ether (ETH) are leading the gains, rising around 6.4% and 18.5% in the same period.

Increasing chances of a spot Ethereum ETF approval drive prices higher

Crypto bulls are speculating on a spot Ether exchange-traded fund (ETF) approval after reports surfaced that the United States Securities and Exchange Commission (SEC) is possibly changing its stance on the issue, possibly due to political pressure, with reports claiming it has asked ETF exchanges to update their 19b-4 filings.

Bloomberg senior ETF analyst Eric Blachunas said they were upping their chances of getting a spot Ethereum ETF approved from 25% to 75%, citing the SEC’s 180-degree shift on the “increasingly political issue.”

Previously, there were allegations of Fidelity changing their application to remove the staking feature, which finance lawyer Scott Johnson said were all indicators of the “SEC laying down its arguments to ETH as security.”

In another X post, Balchunas provided a file indicating that Grayscale has revised its 19b-4 for its Ethereum Mini Trust, stating that other changes could be made throughout the day. Crypto values have soared in the last 24 hours, with ETH rising as much as 27% to an intra-day high of $3,875 on May 21. If a spot Ethereum ETF is approved, the price of Ether and other cryptocurrencies is predicted to increase.

Investors returning to crypto investment funds

The crypto market sustained advances are consistent with the restart of inflows into crypto investment products. CoinShares data showed that bitcoin investment products saw $932 million in inflows for the week ending May 17.

According to CoinShares’ “Digital Asset Fund Flows Weekly” report, issued on May 13, institutional investors increased their exposure to digital assets, with crypto investment products receiving a total of $932 million this week. Once again, Bitcoin investment funds received $942 million in inflows, accounting for the majority of the movement.

According to the research, weekly trading volumes in investment goods fell from an average of $40 billion in March to $10.5 billion in the week ended May 17.

CoinShares head of research James Butterfill said:

“The inflows were an immediate response to the lower-than-expected CPI report on Wednesday, with the latter 3 trading days of the week making up 89% of the total flows, highlighting our view that Bitcoin prices have recoupled to interest rate expectations.”

Meanwhile, Farside Investors stated that around $947 million flowed into spot Bitcoin ETFs last week, a level not seen since March.

Butterfill stated: “Grayscale, which has suffered US$16.6bn of outflows since the January ETF launch, also saw minor inflows for the first time.”

Surprisingly, the inflows occurred after over 700 corporations acknowledged having Bitcoin ETFs in their portfolios last week. 

Strengthening market setup

From a technical standpoint, the crypto market gains today are part of a rebound that began at a support confluence formed by the 50-day exponential moving average (EMA) and the upper trendline of a dominant descending triangle pattern.

Descending triangular formations in an upswing are considered bullish continuations. They resolve when the price breaks above the upper trendline and rises to the maximum height of the triangle.

On May 15, the total market capitalization broke over this triangle. As a result of this technical rule, the crypto market may increase to the technical target of the ruling chart pattern at $2.72 trillion by June, up from the breakout point of $2.23 trillion.

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