Why is the crypto market up today?

The cryptocurrency market is up today, with investors seeing spot ETF inflows and the possibility of a strategic Bitcoin reserve in the United States as favourable drivers for bullish market momentum.

The global crypto market value increased 3.2% in the last 24 hours to $3.71 trillion on December 16. The entire trade volume has also increased by 27% to $162 billion, highlighting the intensity of demand-side pressure.

Bitcoin (BTC), the largest cryptocurrency by market capitalization, has increased 3.5% in the previous 24 hours to $81,587, barely below its all-time high of $106,488 achieved during early Asian trading hours on December 16.

Is Bitcoin on Track to Become the US Reserve Asset?

One of the causes of the bullishness in the crypto market today is US President-elect Donald Trump's recent statement about his plans to construct a strategic Bitcoin reserve and do "something great" with cryptocurrency.

According to Strike's founder and CEO, Jack Mallers, Trump may issue an executive order on "day one" of his second administration designating Bitcoin as a reserve asset.

"It wouldn't be the size and scale of 1 million coins, but it would be a significant position," Mallers told reporters.

Satoshi Action Fund CEO Dennis Porter suggested during an X Space on December 15 that a third Bitcoin reserve measure could be introduced at the state level, following the lead of Texas and Pennsylvania.

Porter said he expects at least ten states to introduce Bitcoin reserve bills.

"This is not going to stop. We will see an increase in the number of these measures. At least ten.

Meanwhile, the US Federal Reserve is projected to lower the benchmark borrowing cost by 25 basis points to 4.25% to 4.5%, marking a 1% interest rate cut since September 18.

Market participants anticipate the latest core Personal Consumption Expenditures (PCE) price index reading this week, which is the Fed's preferred measure of inflation. This analysis will determine if the recent increases in consumer price inflation are coincidental or indicative of a genuine inflation resurgence.

Nonetheless, the season is very bullish for cryptocurrencies, and with President-elect Trump predicted to nurture a crypto-friendly environment, prices are expected to rise even more before the end of the year.

Institutional Demand for Spot ETFs Continues to Soar

The crypto market's continued advances are consistent with massive money flows into spot exchange-traded funds (ETF).

Farside investors estimated that around $2.16 billion was poured into US-based spot Bitcoin ETFs from December 9 to December 13. Approximately $0.6 billion was invested in these items on November 12 alone.

Similarly, spot Ethereum ETFs have had two weeks of uninterrupted inflows and have not had a day of net outflows since November 21.

They have already raised $1.4 billion in the last 14 days, bringing the total assets under administration to a record high of $1.98 billion on December 13.

The constant movement of funds into Bitcoin and Ethereum ETFs indicates increased institutional and retail interest in Ether.

MicroStrategy's continuing buying is the finest example of institutional demand, which now has a Bitcoin reserve worth more than $44 billion.

On December 4, MicroStrategy CEO Michael Saylor hinted at additional Bitcoin purchases. In addition, Bitcoin mining behemoth Riot Platforms stated last Friday that it had purchased 5,117 Bitcoin at an average price of roughly $99,669 per BTC.

Crypto market cap nears $4 trillion

Data from Cointelegraph Markets Pro and TradingView reveal that TOTAL—the total market value of all cryptocurrencies—has risen by more than 34% since November 11. This price action has produced a sequence of higher and lower highs, resulting in an ascending parallel channel on the daily chart, as illustrated below.

An ascending parallel channel pattern is a bullish trend indicator represented by two upward-sloping parallel lines. A breakout above the channel can imply that the upward trend will continue, whilst a breakdown below the channel can indicate a potential trend change.

The price must remain above the immediate support given by the channel's lower border to sustain the uptrend, around $3.57 trillion. If this occurs, TOTAL may advance near the channel's middle boundary at £3.73 trillion, followed by the upper border at $3.9.

This above-the-top border would indicate a positive breakout from the chart pattern, with the following logical advance to the $4.0 trillion level. This would imply a 10.8% increase from the current price.