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▲ Cryptocurrency ©
The cryptocurrency market surged by over 5% in a single day, fueled by expectations of regulations from the U.S. Securities and Exchange Commission (SEC) regarding on-chain stock trading, which stimulated Bitcoin (BTC)'s breakthrough past $80,000 and an altcoin rotation. Amid a sharp increase in Bitcoin short liquidations, the rally spread to high-beta altcoins like Starknet (STRK) and Arbitrum (ARB), as well as Layer 2 tokens, pushing the total cryptocurrency market capitalization to $2.77 trillion.
According to cryptocurrency market data aggregator CoinMarketCap on September 18 (local time), the total cryptocurrency market capitalization rose by 5.84% over 24 hours, reaching $2.77 trillion. The market showed a positive correlation of 37% with gold, while exhibiting a -28% correlation with the Standard & Poor's (S&P) 500, indicating a differentiated trend from the stock market. The market sentiment index also increased from 'Greed' 64 to 74 in a single day. The key background for this rebound was the news that the SEC would allow on-chain trading of stocks, raising expectations for the integration of traditional finance and the cryptocurrency market, as well as increased institutional adoption.
Bitcoin's breakthrough past $80,000 also amplified the gains. As Bitcoin prices surpassed key resistance levels, BTC short liquidations surged by over 918% within 24 hours, and funding rates rose by 51%, indicating that leveraged positions exacerbated market volatility. Simultaneously, as funds moved from Bitcoin to relatively more volatile altcoins, the Altcoin Season Index increased by 7.14%. Particularly in the Layer 2 sector, Starknet surged by 50.5% and Arbitrum by 27.1%, leading the market's upward trend.
In the short term, the sustainability of this rebound will depend on whether the total market capitalization maintains support at $2.7 trillion. This level has been presented as a 23.6% Fibonacci retracement level, and if it holds, there is a possibility of rising to $2.85 trillion, which is the 127.2% Fibonacci extension. The current market capitalization of $2.77 trillion was evaluated as a short-term pivot point and a major resistance level. The Relative Strength Index (RSI) is 68, indicating strong upward momentum, but it has not yet entered the overbought zone in longer timeframes.
Conversely, if the market capitalization falls below $2.62 trillion, it could signal a failed bullish breakout. Given that Bitcoin short liquidations and the rotation of high-beta altcoins amplified this rally, it is crucial whether actual buying interest continues beyond a one-time leverage effect. If altcoins like Starknet and Arbitrum continue to show stronger performance than Bitcoin, it could indicate that the fund rotation was not just a one-day movement.
The key variable for the market going forward is the capital flow into U.S. spot cryptocurrency ETFs. If the market capitalization establishes a daily close above $2.77 trillion, the uptrend could strengthen, but a break below $2.62 trillion could increase the risk of a correction, according to analysis. With regulatory expectations, Bitcoin's breakthrough, short liquidations, and altcoin rotation simultaneously driving the market up, whether spot ETF funds next week will show subsequent inflows from actual institutional buying will determine if the market challenges $2.85 trillion.
*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.*
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