The cryptocurrency market is rising today, November 23, as investors buy the recent dip and the supply of stablecoins on exchanges begins to increase.
Summary
- The cryptocurrency market is rising today, with Bitcoin reaching $86,000.
- This rally comes as investors buy the recent dip.
- Futures open interest and stablecoin supply on exchanges have increased.
Bitcoin (btc) price rose to $86,000, almost 8% higher than this year’s lowest level. Major altcoins like Zcash (ZEC), Cronus (C.R.O.), Monero (XMR) and Aerodrome Finance are up more than 10% in the last 24 hours.
Data compiled by CoinMarketCap shows that the market capitalization of all coins increased by almost 3% to over $2.9 trillion.
Crypto Market Rising as Investors Buy the Dip
One possible reason why the cryptocurrency market is rising is that investors are buying the dip after most coins fell by double digits in recent weeks.
It is common for cryptocurrency and stock market investors to look for bargains after a big drop. This dip buying is common when these assets reach oversold levels. Crypto Market Relative Strength Index Dropped to oversold level of 25 this week.
This drop in buying has also been driven by the fact that US stocks ended the week in the green. The Dow Jones index rose 493 points, while the S&P 500 and Nasdaq 100 indexes rose 65 and 195 points, respectively.
However, the main risk to the current cryptocurrency market rally is that it could be a dead cat bounce or a bull trap. A bull trap is a situation where a falling asset briefly rebounds and then resumes the downtrend.
Crypto Prices Rise as Open Interest and Stablecoin Inflows Rise
The current cryptocurrency market bounce is occurring as activity in the futures market improves. Data compiled by CoinGlass shows that futures open interest increased 3.3% in the last 24 hours to over $125 billion.
Other data shows that 24-hour settlements fell 88% in the same period, to $207 million. A combination of increasing leverage and low liquidations always leads to a substantial upside. Even so, it is common for sales to fall during the weekend.
Meanwhile, Nansen data shows that stablecoins are returning to exchanges. There were $86 billion in stablecoins on exchanges, up from Friday’s low of $85 billion.
The other potential catalyst for the current cryptocurrency market rally is that there will be some notable altcoin ETF approvals this week. Graycale, 21Shares, and Franklin Templeton will publish their XRP ETFs this week.
Recent data show that there is a strong XRP ETF demandand cumulative receipts increased to more than $400 million. Grayscale and 21Shares will also list their Dogecoin ETFs.
