Why did the cryptocurrency market rise today? Three major positive factors erupted: relaxed regulations, new ETF rules, and more.

Why did the cryptocurrency market rise today? Over the past 24 hours, the total cryptocurrency market capitalization increased by $55 billion, reaching $3.54 trillion, with Bitcoin trading at $106,371. The U.S. Department of the Treasury and the IRS issued new guidelines allowing crypto ETFs and trust funds to pledge assets and distribute rewards; the largest compliant crypto exchange in the U.S. re-entered the token sale market through a regulated platform; the recovery of mainstream tokens has driven WLFI to surge.

Why did the cryptocurrency market rise today? Positive factor one: Clarification of U.S. regulations

(Source: Trading View)

The most important catalyst for the rise of the cryptocurrency market today is a historic breakthrough in regulatory policy. The U.S. Department of the Treasury and the IRS issued new guidelines permitting crypto ETFs and trust funds to pledge assets and distribute rewards. This regulatory clarity marks a key step for institutional adoption of cryptocurrencies, enabling institutions to participate in proof-of-stake networks compliantly.

Previously, crypto ETFs and trust funds faced regulatory gray areas regarding how staking rewards are taxed and whether staking activities are permitted. The new guidelines eliminate this uncertainty, opening the door for institutional investors to participate in staking economies. Staking is a core mechanism of proof-of-stake (PoS) blockchains, where participants lock up tokens to secure the network and earn staking rewards. For mainstream PoS blockchains like Ethereum, annual staking yields typically range from 3% to 8%.

This policy has multiple impacts on today’s market rally. First, it increases the attractiveness of crypto ETFs, as investors can benefit not only from token price appreciation but also from staking rewards. Second, it provides a compliant pathway for institutional capital to enter PoS blockchains, potentially triggering billions of dollars in new staking demand. Third, it enhances the overall legitimacy of the crypto market, demonstrating that regulators are adopting a more open attitude toward crypto innovation.

In terms of capital flows, this policy could unlock hundreds of billions of dollars in institutional funds in the coming months. Existing crypto ETFs, such as Ethereum ETFs, can immediately start staking their ETH holdings, generating additional income for investors. This yield enhancement effect will attract more traditional investors to allocate funds into crypto ETFs, creating a positive feedback loop. The market’s optimistic reaction to this policy is reflected directly in today’s crypto market rally.

Why did the cryptocurrency market rise today? Positive factor two: U.S. exchanges return to token sales

The largest compliant crypto exchange in the U.S. is re-entering the token sale market through a regulated platform, starting with the algorithm-driven public sale of Monad. This is the second major catalyst for today’s market rise, as it signals the U.S.’s largest compliant exchange’s renewed embrace of the token financing market. The U.S.’s top compliant crypto exchange was a key participant during the ICO boom of 2017-2018 but withdrew after increased regulation. Now, its re-entry indicates an improved regulatory environment capable of supporting compliant token sales.

However, concerns remain that token allocations may be dominated by insiders, sparking renewed debates about fairness and decentralization in crypto fundraising. Critics argue that if early investors and insiders receive the majority of tokens while retail investors only buy in at high valuations, this pattern resembles traditional venture capital and contradicts the democratizing spirit of crypto.

Despite these controversies, the move by the U.S.’s largest compliant exchange injects confidence into the market. It shows mainstream platforms are willing to support new project financing within a compliant framework, providing an alternative funding channel beyond traditional VC. For today’s market rally, this infrastructural improvement is more meaningful in the long term than mere price speculation.

Why did the cryptocurrency market rise today? Positive factor three: Bitcoin technical strength

(Source: Trading View)

Bitcoin’s price continues to steadily rebound, currently trading at $106,371, slightly below the key resistance level of $108,000. The resilience of the king of cryptocurrencies indicates growing market confidence, supported by recent capital inflows and reduced volatility. If this momentum continues, Bitcoin could solidify its position above key psychological levels, answering why the crypto market is rising today.

The Relative Strength Index (RSI) shows waning bearish momentum, suggesting a potential shift to bullish. RSI measures the speed and change of price movements; when RSI recovers from oversold territory to neutral levels, it often signals that selling pressure has eased and buying interest is emerging. If the upward trend is confirmed, Bitcoin may break through the $108,000 resistance and aim for $110,000.

From a technical perspective, Bitcoin has formed a converging triangle between $105,000 and $108,000, which typically indicates an imminent directional breakout. Volume has been gradually decreasing during consolidation, a classic precursor to a breakout. A decisive move above $108,000 with increased volume would confirm an uptrend, attracting more trend followers.

However, if investors sell again, Bitcoin could lose its current stability. A drop below $105,000 might pull Bitcoin back toward the critical support at around $101,477. Such a correction would weaken bullish sentiment and could trigger technical selling. Therefore, $105,000 is a key level to watch for whether today’s rally can sustain.

WLFI surges 24% to lead the market rally

(Source: Trading View)

World Liberty Financial (WLFI) became the best-performing crypto of the day, soaring 24% to $0.156. The Parabolic SAR indicator confirmed an active upward trend, indicating strong bullish momentum. This price increase highlights growing investor interest and confidence in WLFI’s short-term growth potential. As a DeFi platform supported by the Trump family, WLFI’s surge also reflects political factors influencing the crypto market.

Currently, WLFI trades at $0.156, maintaining support above $0.151 and hitting a monthly high. If the token successfully bounces from this support, it could rise further toward $0.179. The current bullish momentum suggests strong buying pressure; if sustained, the price could extend approximately 15% higher from current levels.

Key technical levels for WLFI

Current Price: $0.156

Key Support: $0.151 (a breakdown would test $0.134)

Upside Target: $0.179 (breakout would open new upside potential)

Momentum Indicator: Parabolic SAR confirms upward trend

If the bullish momentum weakens, WLFI may struggle to maintain gains. Falling below $0.151 could lead to a decline toward $0.134, indicating a possible market correction. Investors should closely monitor the $0.151 support level.

Can the overall market recovery continue?

The total crypto market cap reached $3.54 trillion, growing by $55 billion in the past 24 hours. This strong rebound highlights increased investor confidence and renewed inflows into major cryptocurrencies. Continued recovery of digital assets could further boost investor sentiment, increasing liquidity and overall market participation. Currently, the total market cap remains slightly below the resistance at $3.56 trillion; breaking this level could trigger a new wave of altcoin growth.

This broadening market breadth is characteristic of a healthy bull market. When capital flows are not only concentrated in Bitcoin but also spread to Ethereum and altcoins, it indicates rising risk appetite among investors willing to allocate to more volatile assets. WLFI’s 24% surge exemplifies this capital rotation. However, if the upward momentum weakens, the total market cap might decline. A drop below $3.49 trillion could see it fall toward $3.42 trillion, signaling waning investor enthusiasm and rising short-term risk aversion.