The crypto market is going up today, with Bitcoin and top altcoins continuing the bull run that happened during the weekend. Bitcoin jumped to $89,000, while Midnight (NIGHT) surged by 11%, with its 24-hour volume hitting $8 billion.
Some of the other top leaders in this crypto market rally were tokens like Avantis (AVNT), Audera (BEAT), and Meteora.
Crypto Market Going Up Amid Santa Claus Rally Hopes
One main reason behind the ongoing crypto market rally is the rising hopes of a Santa Claus rally. This rally is defined as a situation where Bitcoin, cryptocurrencies, and other assets jump a few days before Christmas Day.
Historical data on whether this rally happens is mixed, with some reports suggesting that it happens. Others dispute it, pointing to periods when the stock and crypto market plunged during the Christmas season.
Still, the possible reason behind the rally is that investors are buying coins hoping that the bull run will happen.
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Buying the BoJ Rate Hike Decision
The crypto market is going up as investors continue buying the BoJ interest rate hike. As was widely expected, the bank decided to hike rates by 0.25%, pushing them to the highest level in three decades. Most importantly, the bank sent mixed signals on what to expect in the coming year.
While the BoJ rate hike is bearish for Bitcoin and other cryptocurrencies, it was already priced in. Indeed, Polymarket data showed that the odds of a rate hike were 99%.
Therefore, assets that dropped before the rate hike have rebounded. For example, the Nikkei 225 Index jumped by over 1% today, while the Japanese yen retreated.
Rising Futures Open Interest
Meanwhile, the crypto rally is happening as the industry’s futures open interest continues rising. Its interest rose by 60 basis points on Monday to over $130 billion. Bitcoin’s open interest has rallied to $60 billion, while Ethereum’s figure rose to over $38 billion.
Soaring futures open interest is a sign that bulls are starting to deploy leverage in the crypto industry, which leads to more demand. At the same time, shorts liquidations jumped by 146% to $200 million.
Still, as we have seen in the past crypto rallies, this rebound could be a dead-cat bounce or a bull trap. A dead-cat bounce is a situation where investors buy an asset in a free fall, and then it resumes the downtrend.
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