The crypto market had been stagnant for roughly three months, and Bitcoin (BTC) was capped below the $10,000 resistance level since September 2019, but that all appears to be changing now. The crypto market has roared to life, with Bitcoin (BTC) rising from $9,100 to $10,200 in just a week, a gain of 12%. Ethereum (ETH) has rallied even stronger from $235 to $325, which is a gain of 38%. Notably, this rapid crypto resurgence has pushed the total crypto market cap to $305 billion, a gain of $35 billion in just a week.
Considering that Ethereum (ETH) is leading this bull run, with the Ethereum (ETH) market cap gaining $10 billion in only a week, it seems likely that this rally has been sparked by the Decentralized Finance (DeFi) yield farming frenzy.
Essentially, DeFi platform Compound launched a native token, and offers big bonuses paid with this token to borrowers and lenders. This has caused a massive influx of borrowing and lending on Compound as users rush in to earn tremendous crypto interest rates, and other DeFi platforms have launched their own yield farming mechanisms as well.
The end result is a ton of people are buying crypto, especially stablecoins, Ethereum (ETH), and Bitcoin (BTC), in order to make quick money with yield farming, and this is causing a major increase in crypto buying pressure.
Another critically important factor is the Bitcoin (BTC) block halving in May, which has significantly reduced selling pressure. Essentially, the block reward dropped from 12.5 Bitcoins (BTC) to 6.25 Bitcoins (BTC), cutting the selling pressure from miners in half.
It has long been anticipated that the block halving would lead to a major crypto rally, since after every block halving in the past Bitcoin (BTC) has rallied by over an order of magnitude.
Indeed, although the crypto market has been stagnant for most of the time since the block halving on May 12, it also hasn’t dropped much, and this may be due to lack of miner selling pressure.
Zooming out, although Bitcoin (BTC) has not definitively cleared the $10,000 resistance level, since Bitcoin (BTC) has risen to $10,000 several times since September 2019 only to be turned back, it appears this attempt at breaking $10,000 is quite strong, with Bitcoin (BTC) trading solidly above $10,000.
If Bitcoin (BTC) can continue the uptrend and reach $11,000, which seems more likely than not, then fear of missing out (FOMO) will probably kick in, and Bitcoin (BTC) would be in a good position to make a run towards the all-time high of $20,000.