Bitcoin's market capitalization reaches record high, crypto inflows hit second largest weekly inflow, and short position liquidations accompany market rally.

The cryptocurrency market is experiencing a surge today, witnessing a 5.8% increase in global market capitalization, reaching $2.51 trillion on March 4th. This upturn has resulted in Bitcoin (BTC) strengthening its market dominance to 53.3%, with its market capitalization hitting a fresh all-time peak.

Bitcoin (BTC) has demonstrated an impressive 8.5% rally in the past 24 hours, achieving an intra-day peak of $68,602 on March 4th. Other major cryptocurrencies such as Ether (ETH), Cardano (ADA), XRP (XRP), and Dogecoin (DOGE) have also seen notable gains.

Now, let's delve into the primary driving forces behind today's crypto market movements.

Bitcoin’s market capitalization reaches a historic high

Bitcoin's market capitalization has surged to a new record high against the dollar. The rally of BTC to $68,602 on March 4th pushed its total market value to $1.33 trillion. The last time BTC's market cap surpassed $1.3 trillion was over two years ago, on November 10, 2021, when it reached $68,990.

The market capitalization of a cryptocurrency represents the total value of the digital asset, calculated by multiplying the number of coins in circulation by the current spot price of the coin. At the time of writing, there were 19,644,550 BTC in circulation, according to data from CoinMarketCap.

Bitcoin's recent upward price momentum has been attributed to the impending supply halving, which is anticipated to slash miner rewards by 50%. CoinMarketCap data indicates that there are 6,870 blocks remaining until the halving, which is approximately 48 days away.

Furthermore, the approval of spot exchange-traded funds (ETFs) in the United States has also contributed to Bitcoin's price surge, as these ETFs continue to attract more capital.

Crypto inflows mark the second-largest weekly influx of $1.8 billion

The price of BTC continued its ascent toward its all-time high amidst growing inflows into spot Bitcoin ETFs.

According to CoinShares' Digital Asset Fund Flows Weekly Report, crypto products registered their second-largest weekly inflow, totaling $1.84 billion. This was accompanied by a record $30 billion in trading volume, accounting for "50% of global Bitcoin daily trading volumes on trusted exchanges," as stated in the report.

James Butterfill, an analyst at CoinShares, remarked,

"Total assets under management (AuM), after recent price rises, are now very close to the all-time high at US$82.6bn, just shy of the US$86bn peak set early November."

According to the report, Bitcoin accounted for "94% of the inflows" at $1.72 billion, with U.S.-based funds continuing to dominate, accumulating net inflows totaling $1.88 billion.

These inflows contrast with the increasing outflows from the incumbent Grayscale Bitcoin ETF, GBTC. Following a significant decline towards the end of February, GBTC outflows have reversed course in March, resulting in outflows totaling $1.46 billion over the past week.

While institutional capital continues to pour into Bitcoin, there has been a resurgence in short investor activity, with an additional $22 million in inflows, according to CoinShares.

$346 million in crypto liquidations accompanies the crypto market surge

The rally in the crypto market has triggered a wave of short position liquidations, totaling over $348.2 million in 24 hours. In the last hour alone, short leverage position liquidations amounted to $26.9 million.

Bitcoin short liquidations led the way with $107.71 million in total shorts wiped out, while Ether liquidations totaled $41.92 million.

Despite the losing streak for short-sellers, " $3 billion in open interest has been added to the #crypto market over the last 24 hours," according to crypto trading analysis platform Coinalyze.

Open interest (OI) serves as a measure of the total value of all outstanding crypto futures contracts across exchanges. A high OI value indicates increased market activity and investor sentiment.

Moreover, there is growing optimism surrounding spot ETFs and the imminent Bitcoin halving, which has led to a surge in positive sentiment. Data from Alternative.me, a platform tracking "emotions and sentiments" surrounding cryptocurrencies, indicates that the Crypto Fear and Greed Index has now entered the "extreme greed" zone.

The influx of institutional capital into crypto funds, the potential introduction of a spot Ether ETF, and the upcoming Bitcoin halving all point to a robust bull market.

This article does not provide investment advice or recommendations. Every investment and trading decision carries risks, and readers should conduct their own research before making any decisions.