Why Is The Crypto Market Up Today?

What Happened

Bitcoin Cash (BCH) rose about 28% over 24 hours to near $340 and is up about 54% over seven days. CME Group announced BCH futures on September 22, set to launch October 19 pending regulatory review.

Market Context

The crypto market trades at $2.93 trillion, up about 1.39%% since yesterday’s close, five days after it broke out of an inverse head and shoulders pattern.

The market broke its inverse head and shoulders neckline on September 18. A daily close above $2.99 trillion would confirm the next leg, with $3.11 trillion and $3.27 trillion above. Failing there leaves $2.90 trillion and $2.81 trillion as the floors.

Price has fallen inside a channel since May 6 and now sits at its upper line, on the largest volume bar on a chart, at least in the captured time horizon. The jump came on the September 22 candle, and today’s red candle points to some profit taking.

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Why It Matters

Fund money came back first. Then the traders betting against the rally were forced to buy.

1. Bitcoin ETFs Bought for Four Straight Sessions

Details

Spot Bitcoin ETFs took in $159.45 million on September 17, $433.03 million on September 18, $998.95 million on September 21 and $714.75 million on September 22. That is $2.31 billion in four sessions, days after the same funds recorded heavy outflows.

The swing turned September around. The month stood at $278.85 million out before the streak began, and it now shows about $2 billion in.

Four sessions: $2.31 billion in, the largest on September 21

Month flipped: from $278.85 million out to about $2 billion in

Fund assets: $110.84 billion from $96.25 billion

2. Short Sellers Were Forced to Buy

The rise also caught traders positioned for a drop. When Bitcoin crossed $84,000 on September 21, its highest level since January 31, shorts worth $262.30 million were liquidated in a single hour, against $9.53 million of longs.

A liquidated short is closed by buying, which adds demand on the way up. Liquidations reached $599.15 million across the day, hitting 127,304 traders. Even on September 23, the short liquidations outweigh the longs.

One hour: $262.30 million of shorts against $9.53 million of longs

One day: $599.15 million liquidated across 127,304 traders

Effect: forced buying added to the fund demand

Coin Spotlight: Bitcoin Cash (BCH)

A CME contract opens the coin to funds that cannot trade offshore.

Move: up about 28% over 24 hours, 54% in a week

Trigger: a daily close above $350, about 3% away, opens $387

Floors: $276.91, then $231.66

Analyst’s View: The rally has fund money behind it for now. A daily close above $2.99 trillion before August inflation data lands on September 30 would show it can go further.