Rising crypto of a spot Ether ETFapproval, increasing inflows into crypto investment products and a strong technical setup are some catalysts behind the crypto market’s rise today.
The crypto market is up today, with the total market capitalization rising by 6.66% to rest at $2.6 trillion on May 21. At the same time, Bitcoin’s BTC $69,911 market dominance decreased by 1.44% to 52.6%, as a potential spot Ethereum ETF approval and bullish market structure encouraged traders.
Bitcoin and Ether (ETH) are leading the gains, which have risen approximately 6.4% and 18.5% in the same period.
Let’s explore the reasons why the crypto market is up today.
Increasing chances of a spot Ethereum ETF approval drive prices higher
Crypto bulls are speculating a spot Ether exchange-traded fund (ETF) approval after reports emerged that the United States Securities and Exchange Commission (SEC) is possibly changing its stance on the issue — possibly due to political pressure — with reports stating it has asked ETF exchanges to update their 19b-4 filings.
Bloomberg senior ETF analyst Eric Blachunas said they were increasing their odds of a spot Ethereum ETF approval from 25% to 75%, citing the SEC’s 180-turn on the “increasingly political issue.”
Earlier, there were reports of Fidelity amending its application by removing the staking feature, which finance lawyer Scott Johnson said were all signs pointing to the “SEC laying down its arguments to ETH as security.”
In another X post, Balchunas shared a filing showing that Grayscale has updated its 19b-4 for their Ethereum Mini Trust, adding that more amendments could be seen during the day.
Crypto prices have risen over the last 24 hours, with ETH climbing as much as 27% to set an intra-day high of $3,875 on May 21. If a spot Ethereum ETF is approved, Ether’s price and those of other cryptocurrencies are expected to rise higher.
Investors returning to crypto investment funds
The crypto market’s ongoing gains align with the resumption of inflows into the crypto investment products. Data from CoinShares revealed that cryptocurrency investment products saw inflows totaling $932 million in the week ending May 17.
According to CoinShares’ “Digital Asset Fund Flows Weekly” report published on May 13, institutional investors increased their exposure to digital assets, with crypto investment products seeing total inflows of $932 million this past week. Once again, the lion’s share of movement was attributed to Bitcoin investment funds, which received $942 million in inflows.
According to the report, weekly trading volumes in investment products decreased from a weekly average of $40 billion in March to $10.5 billion in the week ending May 17.
CoinShares head of research James Butterfill said:
“The inflows were an immediate response to the lower-than-expected CPI report on Wednesday, with the latter 3 trading days of the week making up 89% of the total flows, highlighting our view that Bitcoin prices have recoupled to interest rate expectations.”
In the meantime, Farside Investors reported approximately $947 million flowed into spot Bitcoin ETFs last week, a figure not seen since March.
Butterfill said:
“Grayscale, which has suffered US$16.6bn of outflows since the January ETF launch, also saw minor inflows for the first time.”
Interestingly, the inflows come after over 700 firms reported holding Bitcoin ETFs in their portfolios last week.
These disclosures and increasing institutional capital inflows into crypto investment products highlight the growing acceptance and adoption of Bitcoin and other cryptocurrencies in the traditional financial sector, helping the crypto market’s valuation rise today.
Strengthening market setup
From a technical perspective, the crypto market’s gains today are part of a rebound that started at a support confluence comprising the 50-day exponential moving average (EMA) and the upper trendline of a prevailing descending triangle pattern.
Descending triangle patterns in an uptrend are considered bullish continuation patterns. They resolve when the price breaks above the upper trendline and rises by as much as the triangle’s maximum height.
The TOTAL market cap broke above this triangle on May 15. As a result of this technical rule, the crypto market can rise toward the technical target of the governing chart pattern at $2.72 trillion by June, from the breakout point of $2.23 trillion.
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