The global cryptocurrency market surged back above the $2.5 trillion mark, driven by a wave of short liquidations exceeding $250 million amid ongoing geopolitical and macroeconomic developments.
Summary
Crypto market cap reclaimed $2.5T as more than $250M in short positions were wiped out, boosting prices.
Bitcoin touched $73K while ETF inflows rebounded, with $343M into BTC ETFs and $85M into ETH products.
Geopolitical tensions and persistent U.S. inflation remain key risks for future volatility.
According to CoinGecko, the total cryptocurrency market capitalization rose 1.4% to $2.52 trillion on Friday, April 10.
Bitcoin climbed more than 3% to briefly hit $73,000 before easing to around $72,000 at the time of writing. Meanwhile, Ethereum surged past $2,200, with most top 10 cryptocurrencies trading in positive territory.
The rally gained momentum during late U.S. trading hours following reports that Iran was exploring the use of Bitcoin for oil transactions through the Strait of Hormuz.
This unexpected development triggered a sharp move higher in prices, catching short sellers off guard. As a result, traders rushed to cover their positions, accelerating the rally. Data from CoinGlass revealed that over $250 million in short positions were liquidated in the past 24 hours, compared to $95 million in long liquidations.
Crypto ETFs also played a key role in supporting the upward momentum. Data from SoSoValue showed that spot Bitcoin ETFs recorded $343 million in net inflows on Thursday, while Ethereum ETFs saw $85 million in inflows, reversing recent outflows.
The positive sentiment extended beyond crypto, mirroring gains in Asian equity markets. Japan’s Nikkei 225 rose 1.8%, while Hong Kong’s Hang Seng Index and China’s Shanghai Composite also posted gains.
At the same time, investors appeared to rotate away from traditional safe-haven assets. Gold and Silver both declined by around 1%, reflecting shifting market sentiment.
Risks remain: geopolitics and inflation
Despite the rally, key risks continue to loom over the market.
Geopolitical uncertainty remains high, with tensions surrounding the ceasefire still unresolved. The situation involving Iran and the United States continues to evolve, raising concerns about potential disruptions and market volatility.
Additionally, inflation in the U.S. remains persistent. Data from the U.S. Bureau of Economic Analysis showed that the core PCE index rose by 0.4%, indicating that price pressures are not easing as quickly as expected.
This could prompt the Federal Reserve to maintain a hawkish monetary stance, potentially delaying interest rate cuts. Higher borrowing costs typically weigh on risk assets, including cryptocurrencies.
