Why did the cryptocurrency market rise today…Will it break through $2.7 trillion?

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The cryptocurrency market rebounded, driven by favorable macroeconomic conditions and institutional capital inflow, but the sustainability of the uptrend depends on defending the $2.57 trillion market cap.

According to CoinMarketCap, a cryptocurrency market tracking site, on September 3 (local time), the total cryptocurrency market cap rose by 1.81% over 24 hours to reach $2.64 trillion. The market showed a 90% correlation with gold and a 58% correlation with the S&P 500 index, indicating a macro-driven rally fueled by interest rate and liquidity expectations.

Bitcoin (BTC) led the rally with a market share of 59.6%. The market was driven more by rising major stock indices and a recovery in risk asset preference than by cryptocurrency-specific positive news. Bitcoin emerged as a representative high-risk, high-return asset most easily accessible to institutional investors. Moving forward, whether the S&P 500 index maintains the 7,666 level will be a crucial variable.

Institutional funds and speculative rotation by individual investors also amplified the gains. The assets under management (AUM) of US Bitcoin spot ETFs increased to $100.14 billion, and the Fear & Greed Index recorded 72, indicating 'Greed'. The Altcoin Season Index was tallied at 34, while INDEX surged by 64% and PONS by 35%. Listing catalysts, Robinhood Chain, and memecoin-related narratives facilitated the movement of funds into high-volatility assets.

In the short term, the key is whether the total market cap will break through its recent high of $2.7 trillion. If the 23.6% Fibonacci Retracement level of $2.57 trillion is defended, the upward trend could continue. However, if this support level breaks, it could be interpreted as a sign of weakening macroeconomic-driven upward momentum. Going forward, US economic indicators, Bitcoin spot ETF capital flows, and the spread of rising altcoin sectors are expected to determine the market's direction.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*