Four reasons why the crypto market is rallying today: Will bulls maintain control?

Key takeaways:

• US government bailout plans and currency swap lines with the UAE are easing global liquidity fears and lowering credit crisis risks.

• Record Bitcoin ETF inflows and rising BTC miner profits suggest strong bullish momentum despite the ongoing war in Iran.

The total cryptocurrency market capitalization surged to an 11-week high on Wednesday as Bitcoin (BTC) climbed to $79,000 and Ether (ETH) reached $2,400. The bullish momentum occurred as investors grew more confident that immediate US recession risks were fading, despite sustained high oil prices resulting from the war in Iran.

Traders are now weighing whether Bitcoin and Ether are destined for further gains or if a short-term correction is imminent given that economic recession risks persist.

The tech-heavy Nasdaq-100 index reached a record high on Wednesday as traders awaited Tesla (TSLA US) quarterly earnings. Brent crude prices rose 9% over two days after reports indicated Iran targeted two vessels in the Strait of Hormuz. Elevated energy costs increase the likelihood of economic stimulus, providing a temporary buffer for risk assets.

US liquidity plans and Bitcoin ETF inflows may offset recession fears

US President Donald Trump reportedly stated during a CNBC interview that “the federal government should help” Spirit Airlines, a budget carrier that has experienced bankruptcy twice since 2025. The Trump administration previously provided capital to chipmaker Intel (INTC US), utility Southern Company (SO US) and defense contractor L3Harris (LHX US).

Direct US government intervention in private firms and the US Treasury signals that credit lines for allies have eased liquidity concerns. US Treasury Secretary Scott Bessent noted Wednesday that both the US and the United Arab Emirates would benefit from a currency swap line intended to “maintain order in the dollar funding markets.”

US allies are facing pressure to sell US bonds to raise dollars for local defense, imports and liquidity amid the collapse of oil revenue and disruptions in the Strait of Hormuz. Potential currency swaps ease these dollar shortages, preventing a spike in US Treasury yields. The overall impact includes lower borrowing costs and a reduced risk of an immediate credit crisis.

Six consecutive days of inflows into US-listed Bitcoin exchange-traded funds (ETFs), totaling $1.54 billion, have likely boosted sentiment. The successful launch of the Morgan Stanley Bitcoin Trust (MSBT US), which reached $145 million in total net assets in under three weeks, improved Bitcoin’s risk perception despite global socio-economic uncertainty.

Related: Bitcoin inflows to Binance fall to 2023 low as BTC bulls set target on $80K

Bitcoin miner profitability eases short-term sell pressure

As Bitcoin price neared $79,000, miner profitability hit its highest level since January, according to Luxor’s Hashprice Index. 

Miners recently gained attention as firms sold significant Bitcoin holdings to fund investments in data centers and AI infrastructure. Examples include MARA Holdings (MARA US), Riot Platforms (RIOT US), Core Scientific (CORZ US) and Cango (CANG US). While higher profitability does not guarantee reduced selling pressure from miners, the bullish momentum creates an incentive to accumulate. 

Ultimately, a short-term correlation with US stock markets continues to dictate cryptocurrency trends; therefore, the war in Iran and tech earnings remain decisive for trader sentiment.

As the US government signals that stimulus measures will be used to secure liquidity and address credit concerns, Bitcoin and Ether appear primed to sustain their upward momentum.