What’s Driving the Crypto Market Uptrend Today

The total cryptocurrency market capitalization has experienced a notable surge of 3.2% over the last 24 hours, reaching an impressive $3.71 trillion on December 16. This increase in value is accompanied by a substantial jump in trading volume, which has seen a 27% rise to $162 billion.

Bitcoin and Ethereum Lead the Charge

The largest cryptocurrency, Bitcoin (BTC), has risen 3.5% over the past 24 hours, trading at an impressive $81,587. This price is just shy of the all-time high of $106,488 set during early Asian trading hours on December 16.

Ethereum (ETH), the second-largest cryptocurrency, has also seen a significant increase, climbing 3.25% to trade around $3,976 at the time of publication.

Factors Driving the Crypto Market’s Bullish Trend

Prospects of Bitcoin Becoming US Reserve Asset

One factor contributing to the crypto market’s bullishness is US President-elect Donald Trump’s recent comments on his intentions to build a strategic Bitcoin reserve and do "something great" with crypto. This potential move could have a significant impact on the value of Bitcoin, as it would increase demand for the cryptocurrency.

According to Jack Mallers, founder and CEO of Strike, Trump could issue an executive order on "day one" of his second term to designate Bitcoin a reserve asset status. While the initial investment might not be substantial, with only 1 million coins, it would still represent a significant position.

There are also possibilities of a third Bitcoin reserve bill at the state level, which would follow Texas and Pennsylvania’s lead. Satoshi Action Fund CEO Dennis Porter expects at least 10 states to introduce a Bitcoin reserve bill in total, highlighting the growing interest in cryptocurrencies across different jurisdictions.

Institutional Demand for Spot ETFs Remains High

The crypto market’s ongoing gains align with the substantial capital flows into spot exchange-traded (ETF) funds. Farside Investors reported that approximately $2.16 billion flowed into US-based spot Bitcoin ETFs over the Dec. 9 to Dec. 13 week, while around $0.6 billion entered these investment products on Nov. 12 alone.

Similarly, spot Ethereum ETFs have experienced two weeks of continuous inflows and have not witnessed a single day of net outflow since Nov. 21. They have now attracted $1.4 worth of capital over the last 14 days, taking the combined assets under management to a record high of $1.98 billion on Dec. 13.

Continued Buying by Institutions

The steady capital inflow into Bitcoin and Ethereum ETFs signals heightened institutional and retail interest in Ether. MicroStrategy, an institution that has been actively buying Bitcoin, now holds a reserve worth over $44 billion. The company’s CEO, Michael Saylor, hinted at further Bitcoin buying on Dec. 4.

Additionally, Bitcoin mining giant Riot Platforms announced last Friday that it had acquired 5,117 Bitcoin at an average price of around $99,669 per BTC.

Crypto Market Cap Nears $4 Trillion

Data from Cointelegraph Markets Pro and TradingView shows that TOTAL—the total market capitalization of all cryptocurrencies—has rallied more than 34% since Nov. 11. This price action has recorded a series of higher highs and higher lows, leading to the appearance of an ascending parallel channel on the daily chart.

An ascending parallel channel pattern is a bullish chart pattern characterized by two upward-sloping parallel lines. A breakout above the channel can signal a continuation of the move higher, while a breakdown below can indicate a possible trend change.

Key Levels to Watch

To sustain the uptrend, the price must hold above the immediate support provided by the lower boundary of the channel at $3.57 trillion. If this happens, TOTAL may move toward the middle boundary of the channel at $3.73 trillion and later to the upper boundary at $3.9.

A breakout above the upper boundary would signal a bullish breakout from the chart pattern, with the next logical move being toward the $4.0 trillion mark. This would represent a 10.8% uptick from the current price.

Investment Advice

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.

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