Why is the crypto market up today?

The crypto market’s rebound picked momentum during the weekend, with its intraday gains drawing cues from the shocking assassination attempt on former president Donald Trump.

Trump’s growing reelection bid boosts crypto demand

The crypto market’s valuation jumped by 2.88% hours after gunfire erupted at Trump’s Pennsylvania rally, with the former president surviving the assassination attempt. Bitcoin (BTC) price also rose above $60,000 for the first time in 10 days.

Interestingly, MAGA (TRUMP), the largest Donald Trump memecoin, also surged by more than 30% after the assassination attempt. 

This upward movement indicates that many crypto traders anticipate a Trump victory in November’s upcoming US presidential election. Such an outcome could lead to more favorable crypto regulations than the current stringent policies under Joe Biden’s administration.

“Based on Bitcoin’s reaction so far, looks like markets are going to begin pricing in a full Trump victory,” noted Will Clemente, founder of crypto research firm Reflexivity Research.

Crypto derivatives market is bullish

The open interest (OI) of all top-ranking cryptocurrencies has risen in the past 24 hours, especially after the Trump news. Moreover, most of these assets show positive funding rates, suggesting long traders pay a fee to short trades to keep their bullish positions open.

The rise in OI and positive funding rates suggest that most traders have a strong bullish sentiment. They are willing to pay a premium to maintain their long positions, reflecting their confidence in the market’s upward movement.

Related: What’s next for Bitcoin price now that German gov’t BTC balance hits zero?

Furthermore, the crypto market’s gains in the past 24 hours coincide with the relatively higher liquidation of short traders than the long ones. As of July 14, the market had witnessed $65.41 million worth of short liquidations compared to $22.93 million in long liquidations.

When a short position is liquidated, the trader must buy back the asset to cover their position. This buying pressure increases the demand for the asset, driving up its price.

Descending channel bounce

From a technical perspective, today’s crypto market gains are part of a consolidation trend inside a prevailing descending channel pattern.

The crypto market tested the channel’s lower trendline as support for the fourth time since March, a move that has lately preceded sharp rebounds. As of July, the market is visibly repeating the fractal, eyeing the 50-day exponential moving average (50-day EMA; the red wave) at around $2.23 trillion as its immediate upside target.

A decisive close above the 50-day EMA could have the market pursue a run-up toward the channel’s upper trendline, akin to its recent bounces. The upper trendline aligns with $2.42 trillion, which served as support during the May-June 2024 session.

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.