After more than six months of decline, Bitcoin has rebounded back to the $80,000 threshold as investors renew their faith in the digital currency. This rally has come at a time when sustained Bitcoin ETF inflows, surpassing $630 million in recent sessions, have boosted the cryptocurrency market, buoyed by the renewed optimism as the US clears the hurdles to pass a critical crypto-friendly legislation.
The Clarity Act: A Clear Path
This week’s crypto appreciation has come after the long-delayed and debated Clarity Act is now law, even some pressing concerns regarding its stablecoin provisions have been raised frequently. Eventually, the Act is now law, and this has given institutional investors long-term confidence about a legal framework for the US Markets.
Institutional Inflows Drive the Price Action
Increasing interest by retailers has seen the spot Bitcoin ETF net inflows increasing $630 million, with global asset managers increasingly allocating a percentage of their portfolios to Bitcoin as a ‘digital gold’ safe haven asset. Ongoing discussions regarding de-dollarisation and increasing trade dynamics amongst the BRICS nationa have increased the focus on cryptocurrencies as an alternative to the US Dollar.
Market Liquidations: A Leveraged Spike
With this rally, Bitcoin is seeing its market dominance hover around 58.6%, even as over $357 million of leveraged short positions have been liquidated over a 24-hour window, with Bitcoin crossing key resistance zones. According to CoinMarketCap, this rally has driven a 2% rise in the market capitalization of cryptocurrencies, making it worth $2.65 trillion.
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