Crypto Market Rally Led by Bitcoin and Ethereum – Here Is Why ETFs and Liquidations Are Driving Gains

• Bitcoin rose about 3.3% to $74,500 while Ethereum jumped more than 10%.
• Spot Bitcoin ETFs attracted over $760 million in inflows over the past five days.
• A wave of short liquidations in derivatives markets helped accelerate the rally.

The cryptocurrency market kicked off the week with a noticeable burst of optimism. Bitcoin climbed roughly 3.3% over the past 24 hours, pushing its price close to $74,500 and reaching levels not seen in about a month and a half. It wasn’t an isolated move either—Ethereum followed with even stronger momentum, surging more than 10% to hover around $2,360.

Once Bitcoin and Ethereum start moving, the rest of the market usually doesn’t stay quiet for long. That pattern played out again this week. Several major altcoins joined the rally, posting gains across the board.

XRP, Solana, and Dogecoin all advanced, helping drive broader market enthusiasm. XRP led the pack while Solana gained about 5.8% and Dogecoin added roughly 6.7%. In some corners of the market, altcoins climbed as much as 7.4%. Not explosive… but certainly enough to shift sentiment.

ETF Inflows Continue to Support Bitcoin Demand

Analysts say one of the biggest forces behind the rally has been the steady stream of capital flowing into spot Bitcoin exchange-traded funds. Institutional demand through these vehicles has remained surprisingly consistent.

Over the past five days alone, spot Bitcoin ETFs recorded more than $760 million in net inflows. Notably, none of those sessions saw capital flowing out. That kind of uninterrupted buying pressure tends to strengthen market confidence.

Ethereum has also been benefiting from institutional interest. Spot Ethereum ETFs pulled in around $160 million during the same period, suggesting that large investors are still actively building exposure to major crypto assets.

When traditional capital markets start channeling money into crypto like this, the effects often ripple through the entire ecosystem.

Short Squeeze Adds Fuel to the Rally

Another catalyst quietly driving prices higher came from derivatives markets. According to data from CoinGlass, about $344 million in leveraged crypto positions were liquidated over the past 24 hours.

Nearly 80% of those liquidations were short positions.

That detail matters. When traders bet on falling prices and the market instead moves upward, they’re forced to close their positions—often by buying the asset back. That buying pressure can accelerate rallies very quickly.

In this case, the wave of short liquidations created what traders call a short squeeze. As bearish positions unwound, the forced buying added extra momentum to an already rising market.

Geopolitical Developments Influence Market Sentiment

Macro events also played a role in shaping investor sentiment. Markets responded cautiously to signs that tensions in the Middle East might be easing slightly.

Former U.S. President Donald Trump said that the United States is currently holding talks with Iran. However, officials in Tehran pushed back on that claim, denying they had requested a ceasefire.

At the same time, Iran’s foreign minister Abbas Araghchi indicated that the Strait of Hormuz remains open for commercial shipping—provided vessels do not belong to countries considered hostile.

That clarification helped calm markets a bit. Over the weekend, two liquefied natural gas tankers traveling to India successfully passed through the strait, marking the first confirmed commercial transit since the conflict escalated.

Still, the broader energy market remains tense. Brent crude oil continues trading above $100 per barrel, reflecting ongoing uncertainty around global supply routes.

Federal Reserve Decision Looms Over Markets

Looking ahead, investors are now turning their attention toward the U.S. Federal Reserve and its upcoming interest-rate decision. Monetary policy remains one of the biggest drivers of liquidity across global financial markets.

If the Fed signals a softer stance on rates, risk assets—including cryptocurrencies—could benefit from renewed capital flows.

On the other hand, a more hawkish outlook might slow the rally. Crypto markets tend to react quickly to shifts in liquidity expectations.

For now, though, the tone across the digital asset space has clearly improved. Bitcoin pushing toward new highs for the month, strong ETF inflows, and a wave of short liquidations have all combined to give the market a noticeable jolt of energy.

Whether that momentum continues… well, the next few weeks may decide.

Disclaimer: BlockNews provides independent reporting on crypto, blockchain, and digital finance. All content is for informational purposes only and does not constitute financial advice. Readers should do their own research before making investment decisions. Some articles may use AI tools to assist in drafting, but every piece is reviewed and edited by our editorial team of experienced crypto writers and analysts before publication.