The cryptocurrency market surged 2% on Wednesday, with $258 million in short positions liquidated over the past 24 hours.
Bitcoin climbed above $109,000 following a U.S.-Vietnam trade agreement and rising M2 money supply.
Ethereum, XRP, and Solana gained 7%, 3%, and 4% respectively as altcoins recovered.
Bitcoin (BTC) rebounded to $109,000 on Wednesday, driven by heightened open interest (OI) reaching 689.78K BTC ($75 billion) amid positive macroeconomic developments. The broader crypto market followed suit, with top altcoins like Ethereum (ETH), XRP, and Solana (SOL) rising 7%, 3%, and 4% respectively.
Bitcoin and Crypto Market Rally Triggered by Trade Deal and M2 Growth
The crypto market regained a $3.5 trillion valuation after a 2% uptick on Wednesday.
This rebound followed the announcement of a U.S.-Vietnam trade agreement, which reduces tariffs on select Vietnamese exports. The deal imposes a 20% tariff on Vietnamese imports to the U.S., while "transshipped" goods face a 40% levy. Vietnam will also grant zero-tariff access to U.S. products.
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Bitcoin’s 3% surge over 24 hours pushed its futures OI from 651.66K BTC to 689.78K BTC (per Coinglass). The rally aligns with a 4.5% YoY rise in U.S. M2 money supply ($21.94 trillion in May), marking 19 consecutive months of growth. M2—tracking cash, deposits, and liquid assets—often signals Bitcoin’s price momentum with a 3–6 month lag.
Meanwhile, altcoins flourished: Ethereum, XRP, and Solana led gains, while the top 100 tokens averaged 7% increases. The market surge liquidated $320.6 million in positions ($62.8 million longs, $258.5 million shorts).
Key Drivers of the Crypto Rally
- Macroeconomic Tailwinds: Rising M2 liquidity historically precedes Bitcoin rallies.
- Trade Policy Shifts: The U.S.-Vietnam deal bolstered investor confidence.
- Altcoin Recovery: Ethereum and Solana outperformed, signaling renewed risk appetite.
FAQ: Crypto Market Rebound
Q: Why did Bitcoin rise above $109,000?
A: The U.S.-Vietnam trade agreement and expanding M2 money supply fueled investor optimism.
Q: How does M2 growth affect cryptocurrencies?
A: Increased liquidity often flows into risk assets like Bitcoin after a 3–6 month lag.
Q: Which altcoins gained the most?
A: Ethereum (+7%), Solana (+4%), and XRP (+3%) led the altcoin recovery.
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