Bitcoin is the key driver for the entire crypto market, with a market share of 53.8%. Since March 11 (196 days), the price action has been trending sideways in a broad range of $49-74k. On September 27, the upper end of the range crosses through $69,400. As soon as buyers break above this mark, we could see the onset of a rally and an improvement in sentiment. The Fear and Greed Index stands at 61, after exiting the neutral zone and jumping into Greed territory.
The rally is now supported by increased risk appetite due to dollar weakness and rising US stock indices amid expectations that the Fed will continue to slash interest rates through year-end.
On the flip side, restraining factors include US macro data, which could lead to shift sentiment in FX and equity markets, which, in turn, would impact bitcoin. Miners selling to cover operating costs and investors selling BTC in spot BTC ETFs could also cap gains.
Algo trading in the spot and futures markets, where leverage is used, also exerts a powerful impact on the market. When the market becomes illiquid, there is an increased risk that margin positions will be liquidated, thus stoking higher volatility.