Virtual Assets, 180-Degree Reversal on Trump's Word... $200 Million in Short Positions Liquidated

▲ Virtual Asset Trading

Analysis suggests that the cryptocurrency market showed an upward trend, with a recovery in risk asset preference amid easing geopolitical tensions and changes in the macro environment.

BeInCrypto reported on May 4 (local time) that the cryptocurrency market rose by approximately 1.8%, expanding its total market capitalization to approximately $2.63 trillion.

According to the report, the key background for this surge is Donald Trump's announcement of 'Project Freedom'. This measure was interpreted as easing military tensions in the Strait of Hormuz, triggering capital inflow into risk assets across the board, alongside a drop in oil prices.

In particular, as geopolitical risk premiums diminished, a 'risk-on' sentiment strengthened in both stock and cryptocurrency markets, resulting in capital flowing back into digital assets, according to analysis.

Internal market factors also supported the rise. Bitcoin led the upward trend, breaking past $80,000, and in this process, approximately $285.51 million worth of short positions were liquidated, accelerating the pace of the ascent.

From a technical perspective, the formation of a golden cross, where the 50-day moving average crossed above the 100-day moving average, was also cited as a positive factor, strengthening signals of institutional capital inflow. However, despite the upward trend, 'volume divergence' was observed, with trading volume not adequately accompanying the rise, simultaneously raising caution signals about the sustainability of the short-term rally.

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