The crypto market rose 2.4% to $2.51 trillion on Friday, largely due to a shift in global risk sentiment following signs of a potential slowdown in the Middle East.
Conclusion
- Crypto prices rallied on Friday after crude oil prices fell from multi-year highs.
- A wave of short-term liquidation in depressed markets and a return to major crypto ETFs also supported the recovery.
Bitcoin (BTC), the leading crypto asset by market capitalization, rose nearly 4% to close to the $72,000 mark. Ethereum (ETH) is up 4.3% in the past day, trading at $2,100 at the time of writing. Other major crypto assets such as BNB (BNB), XRP (XRP), Solana (SOL) and Dogecoin (DOGE) also made modest gains on the day.
It’s important to note that today’s market rally was an independent event, as it was separate from both traditional US stock indexes and technology stocks. During American trading hours, the Dow Jones index fell 739 points, or 1.56%, while technology stocks such as the S&P 500 and Nasdaq-100 fell 103 and 431 points, respectively.
The crypto market has improved investor risk sentiment after a sharp drop in oil prices worldwide. Notably, Brent crude fell more than 7% today, reducing immediate inflation fears and creating a favorable environment for digital assets.
Short liquidation is on the rise
As the price of crypto rose, it trapped short sellers and led to the liquidation of these high-quality positions. Data from CoinGlass shows that about $246 million has been liquidated from squeezed markets, most of which came from short positions.
The overall crypto market also increased by 5.2% on Friday, indicating that investors are pouring new capital into the market.
Import ETFs and Coinbase Rewards
Inflows into spot ETF products also supported recent gains. Bitcoin ETF spots hit $53.87 on Thursday, according to SoSoValue data, marking the fourth straight day of inflows for the funds. A similar trend was seen in their Ethereum counterparts, which posted three consecutive days of inflows.
At the same time, Coinbase Premium has also risen sharply over the past 24 hours, indicating that US institutions are paying a premium to secure Bitcoin over global prices. Traders often see this as a strong signal that institutional “smart money” is leading the current market value.
The crypto market rallied after Trump’s recent comments
Crypto prices also gained after US President Donald Trump hinted that the ongoing war between the two countries could end.
This seemed to calm investors’ fears of a protracted war, which in turn created risk sentiment among investors who were moving capital from safe havens into riskier assets like crypto.
Disclosure: This article does not provide investment advice. The content and materials on this page are for educational purposes only.
