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Key points:

• The crypto market is up 2.5% on May 22, with its capitalization above $3.48 trillion for the first time since February.

• Bitcoin’s new all-time high of $111,888 is boosting investor confidence across the crypto market.

The cryptocurrency market is up today, with the total market capitalization rising by approximately 2.5% in the last 24 hours to reach $3.48 trillion on May 22. The total 24-hour trading volume across all crypto assets has also increased by 55% to $193.2 billion, reinforcing the intensity of the demand-side activity.

Let’s look at the factors driving crypto prices up today.

Crypto prices buoyed by Bitcoin’s new all-time highs

Today’s gains were led by Bitcoin (BTC), which broke through $111,000 for the first time on May 22, setting a fresh all-time high, as market sentiment continues to improve after last month's tariff-induced sell-off.

Data from Cointelegraph Markets Pro and TradingView shows BTC rose as much as 7.3% to a new record high of $111,888 on May 22 from a low of $104,200 on May 21, lifting the broader crypto market with it.

Major altcoins like Ether (ETH), Cardano (ADA), and Solana (SOL) followed Bitcoin’s lead and flashed green, as shown in the chart below. 

The performance comes from easing trade tension between the United States and China and Moody's downgrading the US debt rating. This has prompted investors to turn to Bitcoin as a store of value, boosting overall crypto market sentiment.

Additionally, the US Dollar Index (DXY) has been on a downtrend since early November and is down more than 9.84% to 99.096 from its Jan. 13 peak of 110.17. The DXY has dropped more than 2.6% over the last 10 days.

Crypto market participants often point to increased involvement from traditional financial firms as a reason for crypto gains.

This week, JPMorgan Chase CEO Jamie Dimon said that the bank will offer clients access to Bitcoin after years of skepticism.

Massive short liquidations fuel price surge

Another driver of today’s rally is a wave of short liquidations that have triggered a powerful short squeeze, as data from CoinGlass shows.

In the past 24 hours, over $495 million in crypto positions have been liquidated across the crypto market, with approximately $300 million representing short position liquidations. Short BTC leveraged positions totaling $173 million have also been liquidated on the day.

The largest single liquidation occurred on Bybit, where a BTC/USD position worth $6.36 million was liquidated. 

The magnitude of this liquidation mirrors the Nov. 6 liquidation event, where more than $426 million in short leveraged positions were liquidated, accompanying a 16% increase ($356 billion) in the total crypto market capitalization on the same day.

The short squeeze has played a crucial role in amplifying the current rally, particularly for Bitcoin, which has led the market with its charge past $110,000.

Related: Bitcoin 'looks exhausted' as next bear market yields $69K target

Total market cap validates bull flag

TOTAL — the combined market capitalization of all cryptocurrencies — confirmed a bull flag pattern on May 20, when it breached the upper boundary of the flag in the weekly timeframe at $3.27 trillion, coinciding with the 50 simple moving average (SMA). 

TOTAL is currently testing the resistance level at the $3.5 trillion psychological level, as shown in the chart below.

A high volume move above this level could accelerate the recent bullish momentum toward the technical target of the prevailing chary pattern at $3.84 trillion — a 17% ascent from the current level.

The relative strength index (RSI) is at 70 and has risen from 44 over the last 48 hours, indicating increasing bullish momentum.

Conversely, a four-hour candlestick close below $3.35 trillion will likely push the price to test the upper boundary of the flag at $3.27 trillion. Losing this support will invalidate the bullish thesis, and TOTAL could continue its consolidation within the flag for a few more days.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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