The past 24 hours have been very good for the overall crypto market. From the crypto prices front, we are seeing a market-wide rally in almost all major crypto prices, ranging from heavyweights like Bitcoin, Ethereum and Binance Coin all the way down to smaller altcoins too, some of which have managed to rally upwards of 30-40% in this timeframe.

However, one of the biggest stunners in the market definitely has to be the king coin, Bitcoin - the largest crypto by market capitalization staging a recovery of nearly 12% in the past 24 hours, and is currently trading just shy of the $25,000 mark. This jump has also resulted in Bitcoin almost touching its 6-month high today, as the last time BTC price traded above $24,500 was back in August 2022.

On the decentralized finance front too, we have been seeing a strong recovery happening all across the board. The total-value-locked in DeFi has jumped a hefty 6% in the past 24 hours and has finally breached the $50 billion in TVL mark for the first time in over three months, since before the market crash resulting from the collapse of the FTX crypto exchange.

Alongside this, some of the top decentralized finance (DeFi) protocols also saw major rallies amongst their ranks that contributed to the overall rally. The obvious star of the show was Lido DAO, which gained over 9.7% in TVL over the past 24 hours while other major protocols like MakerDAO, Curve, Aave, Convex Finance and Uniswap - all gained anywhere between 5% to 6%. Native tokens for all the DeFi protocols mentioned in the list above also saw major bump ups in price amid the broader market rally.

Read more: What does Karken's SEC settlement mean for Crypto Staking?

But why are we seeing a rally now?

There are a number of reasons that can be attributed to the rally in the overall crypto market, and as a result, in the DeFi ecosystem too. One of the major reasons could be that a large number of short-sellers in the market seemed to be covering their short positions that eventually resulted in the spike in BTC price.

According to crypto data provider, Coinglass - Bitcoin's liquidations data shows that between 15 and 16 February, a little less than $77.5 million worth of short positions were liquidated while at the same time only $9.3 million worth of long positions were liquidated in the same time.

This indicates that the number of short liquidations was more than 7 times the number of long liquidations and hence suggests an exit of the bearish traders in the market. Such a huge short covering is bound to bring about strong positive action in the market as these short sellers would be buying up BTCs from the market to cover their short positions.

Alongside that, we also saw a major news story being reported by CoinTelegraph a couple of hours ago. According to the report, Four Republican senators have reintroduced the bill to remove roadblocks to crypto investments in retirement accounts. In effect, the bill is trying to bar the US Department of Labor from investigating individuals from "using brokerage windows to invest in cryptocurrency".

According to Alabama Senator Tommy Tuberville,

"Every American should have the right to invest their retirement money how they see fit."

Thus, this bill is attempting to allow United States 401(k) retirement plans to include exposure to crypto assets too. To put that into context, the US 401(k) retirement plans manage about $6.3 trillion worth of assets, as on September 2022, contributed by over 60 million active participants and millions of former employees and retirees. in the scheme. Even if we see 1% of that total sum flowing into crypto assets, that would result in an inflow of approximately $63 billion into the crypto market!

Values as on 16 February, 2023.

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