of The cryptocurrency market suddenly It was born Friday night for the first time since FTX collapsed in early November. Almost all assets rose significantly, and those related to FTX rose significantly.
Bitcoin (Bitcoin 7.81%) has surged 10.9% to trade at $20,909 at 8am ET, surpassing the $20,000 level for the first time since FTX went bankrupt in early November. ethereum (ethereum 6.84%) Up 10.1% to $1,540 on the last day, Solana (Sol 31.85%) was a big move, up 36.1% to $22.53. in the past week, Cryptocurrencies rose 23.2%, 21.5% and 69.9% respectively.
Momentum can be a powerful force in crypto, especially over the weekend. Weekend trading often leads to big moves as traders take a day off and the market has less liquidity (buyers and sellers).
What is accelerating some moves is the liquidation of short positions. According to coinglass.com, $730 million of short positions have been liquidated in the last 24 hours, of which $240 million is in Bitcoin, $261 million in Ethereum and $26.3 million in Solana.
Two macro news items this week are inflation data that show prices have fallen over the past month, leading to speculation that the Fed will soon stop raising rates and may even be forced to cut rates sooner than expected. rice field. This helped boost growth stocks and riskier assets this week, but the momentum hit cryptocurrencies hard Friday night and Saturday morning.
FTX brought us here, so it may be FTX that drives the rally. This means that the liquidator of FTX’s assets has collected his $5 billion in assets and returned them to his clients and sold the leveraged positions as soon as possible. This puts selling pressure on a less liquid market, and if shorts are added to his position, the price may fall. However, if selling slows and short positions are liquidated (like today), a quick rally is likely.
Cryptocurrency prices are basically determined by supply and demand. Demand is key as supply is not increasing rapidly. As FTX collapsed and the crypto winter deepened, many investors and traders either gave up on the market or took short positions to take advantage of weakness. However, as time goes on, there should be more and more blockchain users, fueled by a great deal of corporate interest these days.
I think the long-term trends in cryptocurrencies are still high, but the volatility we’ve seen in the last two months will continue. We need more use cases to destroy old businesses or create new ones, and that’s when it’s time for mass adoption. So Solana is my top cryptocurrency in the long run because it’s low cost and fast. But the rising tide has lifted all ships, and today’s crypto-wide bullishness is helping to push all trades higher.