Why is crypto going up today? Key factors behind the surge

Market sentiment is currently in the “greed” zone, driving more traders to buy and pushing crypto prices higher.
Short liquidations have dominated in recent trading sessions, signaling strong bullish momentum.

In the last 24 hours, the crypto market has experienced a significant decline in trading volume, dropping by over 30%.

However, despite this decrease, the overall market capitalization has slightly increased. So, why is crypto going up, despite the lower trading volume?

Positive market sentiment boosts crypto prices

Positive market sentiment is one of the primary reasons behind the upward trend in crypto prices. According to data from Coinglass, market sentiment has remained optimistic.

The Fear and Greed Index, a popular indicator of investor sentiment, is currently showing “greed.”

Source: Coinglass

This high level of greed often signals increased buying activity, as more traders are driven by FOMO (fear of missing out).

This sentiment can answer the question of why crypto is going up today, as FOMO leads to more buying, pushing prices higher.

When the Fear and Greed Index points to greed, it typically indicates that traders are rushing to enter the market. This creates buying pressure, driving up the prices of major assets.

However, it’s important to note that market corrections often follow this kind of rally, as FOMO can quickly turn into FUD (fear, uncertainty, and doubt), causing volatility in the market.

Bitcoin’s price surge supports market growth

Another key factor explaining why crypto is going up is the positive price movement of Bitcoin, the largest cryptocurrency by market capitalization.

In the last few days, Bitcoin has broken through its $63,000 resistance level and continued to climb, maintaining a price above $68,000.

As of the latest trading session, Bitcoin even reached $69,000, contributing to the overall rise in market capitalization.

Bitcoin’s price stability above key resistance levels provides a strong foundation for the entire crypto market, as its performance often sets the tone for other assets.

With Bitcoin maintaining its upward trend, other cryptocurrencies have followed suit, further driving the market upward.

Short liquidations drive prices higher

An analysis of the crypto liquidation chart shows another reason why crypto is going up. There has been a noticeable increase in the liquidation of short positions over the past few days.

On the 8th of October, short liquidations amounted to around $71 million, while long liquidations were $41 million.

In the next trading session, both short and long liquidations were nearly equal at around $28 million.

However, in the most recent session, short liquidations spiked to almost $80 million, compared to just $38 million in long liquidations.

Source: Coinglass

This trend of increased short liquidations signals that traders betting on price declines are being forced to close their positions as prices continue to rise.

As short positions close, buying pressure increases, leading to further price gains, making the market more bullish.