A crypto market rally is happening, with Bitcoin and most altcoins being in the green. Bitcoin jumped to $87,000 on Monday, while the market capitalization of all tokens jumped to the $3 trillion mark. Some of the top gainers were coins like Canton, Hedera, Story, Bittensor, Kaspa, and Hyperliquid, which jumped by over 6%.

Top crypto gainers | Source: CMC

Crypto market rally happening as investors buy the dip

A potential reason for the ongoing crypto market rally is that investors are buying the dip after plunging by double digits in the past few weeks.

It is common for investors to buy an asset after plunging hard after some time. In this case, the ongoing crypto market rally could be happening as investors anticipate more gains over time now that most coins have become bargains.

However, the ongoing buying the dip could also be part of a dead-cat bounce, a situation where an asset in a freefall bounces back briefly and then resumes the downtrend.

Investors are also buying the dip after Bitcoin and altcoins became highly oversold. For example, Bitcoin’s Relative Strength Index (RSI) moved to a low of 27 on Friday.

Stock market rally 

Another possible reason why the crypto market rally is happening is that investors are paying close attention to the performance of the stock market, which is gaining momentum.

American stock index futures are all in a strong uptrend, with the Dow Jones, S&P 500, and the Nasdaq 100 indices rose by 150, 40, and 200 points, continuing the Friday’s gains. The three gained by 493, 65, and 195 points, respectively.

The same is happening in other countries, with top indices like the KOSPI, Hang Seng, and ASX Indices rising by over 1% on Monday.

It is common for the crypto market to rally when top stock market indices are rising because the two assets are closely correlated.

Futures open interest rising 

The ongoing crypto market rally is happening as third-party data points to improvements in the futures market.

Data compiled by CoinGlass shows that the futures open interest jumped by 1">Copy link