The crypto market is up today, with the global market capitalization rising by 5.8% to rest at $2.51 trillion on March 4. This movement has increased Bitcoin’s (BTC) market dominance to 53.3% as the pioneer cryptocurrency’s market capitalization hit a new all-time high.
Bitcoin (BTC) has rallied 8.5% over the last 24 hours to hit an intra-day high of $68,602 on March 4. Ether (ETH), Cardano (ADA), XRP (XRP), Dogecoin (DOGE) and other top-cap altcoins also rallied higher.
Let’s look at the major factors driving the crypto market today.
Bitcoin’s market capitalization has hit a new record high against the dollar. BTC’s rally to $68,602 on March 4 saw its total market value hit a high of $1.33 trillion. The last time BTC’s market cap reached $1.3 trillion was over two years ago, on Nov. 10, 2021, when it reached $68,990.
A cryptocurrency’s market capitalization is the total value of the digital asset calculated by multiplying the number of coins in circulation by the current spot price of the coin. There were 19,644,550 BTC in supply at the time of writing, according to data from CoinMarketCap.
Bitcoin’s “up only” price rally has been attributed to the upcoming supply halving, which is expected to reduce miner rewards by 50%. Data from CoinMarketCap shows there are 6,870 blocks until the halving, which is roughly 48 days away.
The approval of spot exchange-traded funds (ETFs) in the United States has also contributed to Bitcoin’s price growth as the ETFs continue to suck in more capital.
BTC price continued to march toward its all-time high amid increasing inflows into the spot Bitcoin ETFs.
According to CoinShares’ Digital Asset Fund Flows Weekly Report, crypto products recorded their second-largest weekly inflow, totaling $1.84 billion. This was accompanied by a record $30 billion in trading volume, representing “50% of global Bitcoin daily trading volumes on trusted exchanges,” said the report.
According to the report, Bitcoin accounted for “94% of the inflows” at $1.72 billion, as U. S.-based funds continued to dominate with net inflows totaling $1.88 billion.
This comes against a backdrop of increasing outflows from the incumbent Grayscale Bitcoin ETF, GBTC. After declining significantly toward the end of February, GBTC outflows have reversed their trend in March, bringing the tally for its outflows to $1.46 billion over the last week.
While institutional capital continues to flow into Bitcoin, “recent price moves saw short investors double down with a further US$22m inflows,” according to CoinShares.
Related: Bitcoin passes new all-time high in euros as price reaches $65K
The crypto market rally has fueled a wave of short position liquidations across the market, totaling over $348.2 million in 24 hours. There have been $26.9 million short leverage position liquidations in the last hour alone.
While Bitcoin short liquidations lead the way with $107.71 million in total shorts wiped out, Ether liquidations total $41.92 million.
Despite the short-seller losing streak, “$3 billion in open interest has been added to the #crypto market over the last 24 hours,” according to crypto trading analysis platform Coinalyze.
Open interest (OI) measures the total value of all outstanding crypto futures contracts across exchanges. A high OI value indicates increased market activity and investor sentiment.
Moreover, there is optimism surrounding the spot ETFs and the upcoming Bitcoin halving, leading to increased positive sentiment. Data from Alternative.me, a platform tracking “emotions and sentiments” surrounding cryptocurrencies, shows that the Crypto Fear and Greed Index is now in the “extreme greed” zone.
Increased institutional capital flows into crypto funds, a potential spot Ether ETF and the upcoming Bitcoin halving are strong indications the bull market is here.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.