The global crypto market has started the week on a strong note, with total market cap rising around 5% to $2.93 trillion. Bitcoin, Ethereum, XRP, and Solana are all posting sharp gains as buying pressure returns.
Overall sentiment is also strong, with the Crypto Fear & Greed Index at 76, showing high risk greed among traders.
So, why is the crypto market rallying today?
One of the main reasons behind today’s crypto rally is the sharp drop in oil prices. Brent crude fell 2.80% to around $101 a barrel, easing fears of higher inflation pressure.
The decline came after U.S. President Donald Trump called off planned strikes on Houthi positions in Yemen at the last minute. The Pentagon had earlier prepared for the operation after a request from the Saudi crown prince, but the strikes were cancelled before they began.
Following the decision, Yemen’s Houthis said they would not attack U.S. vessels in the Red Sea. The statement further reduced concerns about a wider conflict that could disrupt oil supplies.
Another major reason behind today’s crypto rally is the wave of short liquidations. Over the past 24 hours, 115,490 traders were liquidated, with total liquidations reaching $769.80 million. Short positions accounted for an 85% share of the losses, around $647 million.
Bitcoin led the liquidations with $421.5 million, while Ethereum followed with $180.31 million. In the latest hour alone, liquidations reached $634.62 million, with about 84% coming from short positions.
Following the surge, Bitcoin climbed to $85,000, its highest level since January, gaining 5.57%.
Ethereum also jumped 5.80% to $2,720, while XRP surged 8.58% to $1.49. Solana followed with a 7.55% gain, reaching $116.26.
Bitcoin dominance has risen slightly to 58.94%, while the CMC Altcoin Season Index stands at 51/100. The index has climbed 35% over the past week, showing stronger interest in altcoins, although it remains below 75.
As Bitcoin led, capital rotated into higher-beta altcoins. Tokens like NEAR Protocol have gained around 20%, while TAO, SUI, AVAX, HBAR, and ADA have all risen more than 10%.
The rally now faces another test with the U.S. PCE inflation report due September 26. Continued weakness in oil prices could support crypto if it helps ease inflation concerns.
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