Crypto market cap surges over $100 billion in less than 24 hours

Bitcoin (BTC) heavily contributed to the gains after it rallied over 4.4% to retest last week’s high of $74,215 before dropping to $72,425 at press time, based on insights from CoinGecko, a crypto metrics platform.

Additionally, Ethereum (ETH) led the wider altcoin market in bullish outlook after it spiked over 5.5% today to reach $2,209, its highest level in five weeks, before sliding to $2,164 at the time of this reporting.

Why did the crypto space surge today?

The main reason why the crypto industry gained over $100 billion today was due to a notable cash inflow to the derivatives market. During the last 24 hours, the crypto Open Interest (OI), a metric that tracks the total number of outstanding derivative contracts, surged by 5.45% to reach $108.62 billion on Friday, based on updates from CoinGlass, an on-chain intelligence platform.

Additionally, the cryptocurreny space surged today, catalyzed by a short squeeze. During the last 24 hours, the total crypto liquidations surged by over 125% to $389.4 million, with around $314 million involving short positions, according to metrics from CoinGlass, a crypto dataset platform.

Is the cryptocurrency bottom in?

The cryptocurrecny market jump today has elicited different reactions from traders, with some viewing it as a dead-cat bounce. Furthermore, on-chain data suggest Bitcoin is in a critical ‘stress test’ phase, as per an analysis by Sunny Mom, an on-chain analyst at CryptoQuat, a blockchain data analytics platform.

“We are at a ‘Value Bottom’ for long-term DCA, but a ‘Structural Bottom’ has yet to form. Expect volatility between $60k–$70k,” Sunny stated.

Nonetheless, if the cryptocurrency market records consistent spot and derivatives demand in the coming weeks, further bullish momentum will be sustained.