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▲ Zcash (Zcash)/ChatGPT generated image ©
As the U.S. Securities and Exchange Commission's (SEC) unconventional move to ease regulations coincided with news of major corporations accumulating Bitcoin (BTC), the virtual asset market successfully rebounded across the board.
According to cryptocurrency market data aggregator CoinMarketCap on May 20 (local time), the total cryptocurrency market capitalization rose by 0.82% compared to 24 hours prior, reaching $2.58 trillion. This upward trend was driven by positive changes in the regulatory environment and news of institutional investor entry, showing a high correlation of 87% with the U.S. stock market's S&P 500 index, thus aligning with macroeconomic trends.
The most powerful catalyst for the rally was the news, reported by Bloomberg, that the U.S. Securities and Exchange Commission (SEC) is preparing an 'innovation exemption' framework. This framework, which would allow stocks to be converted into and traded as cryptocurrency tokens, was perceived as a tremendous boon for the market, indicating a full-fledged integration with traditional financial capital. Furthermore, private space company SpaceX officially confirmed in its Initial Public Offering (IPO) documents that it holds a large amount of Bitcoin, further heightening expectations for institutional capital inflow.
While Bitcoin, the market leader, steadily maintained its 60.1% market share, acting as a strong anchor, capital quickly rotated into specific, highly volatile altcoin sectors. Notably, privacy coins, including Zcash (ZEC), surged by over 18%, and the memecoin sector also rose by 7.6%, recording significantly higher returns than the overall market trend. This is interpreted as investors actively seeking excess returns in niche assets with relatively lower trading volumes and higher volatility once Bitcoin stabilized its price.
The short-term direction of the virtual asset market going forward appears to depend on the results of SpaceX's IPO pricing on the upcoming May 22nd and whether technical support levels are defended. Technically, the market is currently testing the $2.58 trillion resistance level, which is the Fibonacci 78.6% retracement level, and the Relative Strength Index (RSI) stands at 36.54, suggesting there is still room for further recovery. Experts predict that if the market firmly holds the $2.58 trillion support level, it could accelerate its ascent to the next resistance level of $2.64 trillion, but if it fails, there is a possibility of retreating to the $2.54 trillion mark.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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