Contrary to some bearish traders opinion, the cryptocurrency market soared in the past 24 hours, targeting the coveted $1 trillion mark in terms of total capitalization.
Leading the moving train is Ethereum, which is up over 11%, while Bitcoin also pumped by a considerable 7%.
It is imperative to understand that there is a fundamental factor to this move, although TA shows faint reasons.
Yesterday, the cryptocurrency market finally made a move, luckily it was to the upside.
Bitcoin soared by around 5% in the past 24 hours, currently trading at around $20,600.
It is up to the bulls to keep this momentum.
However, there is a catch….
Why the sudden Bitcoin Move?
The recent pump saw the liquidation of over $800 million worth of predominantly short positions.
Commenting on the matter was Arthur Hayes – the CEO and co-founder of the popular derivatives exchange BiteMEX.
According to him, the recent pump has something to do with the US government.
He explained that the US Treasury “is thinking about supplying the market with more short-term T-bills to alleviate a shortage.”
According to him, money market funds “like short-term T-bills, but there are ain’t enough so they park their money in the Fed’s reverse repo facility. It earns a similar yield. Credit risk is also a factor…”
Going further he explained that there’s $2.2 trillion sitting in Fed’s Reverse Repurchase Facility (RRP) and that if this number reduces, the market will continue increasing.
What to note
While these buy backs and re-issues of new on-the-run T-bills have not happened yet, if the anticipation goes south get ready for a reversal.