What are the key factors behind the surge in cryptocurrency today

CoinJiexi reported:
The market sentiment is currently in the “greed” zone, prompting more traders to buy and driving up the prices of cryptocurrencies.
Short-term liquidation has dominated the recent trading period, indicating a strong bullish momentum.
In the past 24 hours, the trading volume in the cryptocurrency market has dropped significantly, by over 30%.
However, despite the decrease in trading volume, the overall market value has slightly increased. So why is the cryptocurrency still rising despite the low trading volume?
Positive market sentiment is driving up cryptocurrency prices.
Positive market sentiment is one of the main reasons behind the upward trend in cryptocurrency prices. According to the following data from Coinglass, market sentiment remains optimistic.
The Fear and Greed Index, a popular investor sentiment indicator, currently shows “greed”;
This high level of greed often signals an increase in buying activity as more and more traders are driven by FOMO (fear of missing out).
This sentiment can answer why cryptocurrencies are rising today, as FOMO leads to more purchases and pushes up prices.
When the Fear and Greed Index points to greed, it usually indicates that traders are eager to enter the market. This creates buying pressure and drives up the prices of major assets.
However, it is worth noting that market corrections often accompany such rebounds, as FOMO can quickly turn into FUD (fear, uncertainty, and doubt), leading to market volatility.
Another key factor explaining the rise in cryptocurrency prices is Bitcoin, the largest cryptocurrency by market capitalization.
In the past few days, Bitcoin has surpassed the resistance level of $63,000 and continues to rise, with prices remaining above $68,000.
As of the most recent trading day, Bitcoin even reached $69,000, contributing to the overall growth of the market.
Bitcoin’s price stability above key resistance levels provides a solid foundation for the entire cryptocurrency market, as its performance often sets the tone for other assets.
With Bitcoin maintaining an upward trend, other cryptocurrencies have followed suit, further driving the market up.
Short-term liquidation is pushing up prices.
The chart of cryptocurrency liquidation reveals another reason for the rise in cryptocurrency. In the past few days, liquidation of short positions has increased significantly.
On October 8th, the short-term liquidation amount was approximately $71 million, while the long-term liquidation amount was $41 million;
On the next trading day, the liquidation of short and long positions was almost equal, at around $28 million.
However, on the most recent trading day, short-term liquidation soared to nearly $80 million, while long-term liquidation was only $38 million.
The increasing trend of short liquidation indicates that traders who bet on price declines are being forced to close their positions.
As short positions are closed, buying pressure increases, leading to further price increases and a more bullish market.
Why are cryptocurrencies rising?
The rise in the cryptocurrency market can be attributed to several factors, including the positive market sentiment reflected by the Fear and Greed Index, Bitcoin’s strong price performance, and the liquidation of short positions.
These factors collectively drive the market higher, even with a decrease in trading volume.
Although the current trend is positive, traders should be aware that the rapid rise in prices may lead to a market correction soon.