As the call for further bitcoin rallies grows, the spot market is experiencing a decline in participation, making the market more susceptible to erratic price movements. The trading volume of bitcoin has recently dropped below $8 billion, its lowest point since October 2023 when the cryptocurrency's value was under $40,000, according to data from Glassnode.

This significant decrease in volume, from highs over $25 billion in early February, may lead to reduced market depth and increased sensitivity to changes in market flow. Market depth, which measures the availability of buy and sell orders near the current price, is crucial for assessing liquidity. A decrease in market depth means that large orders can cause significant price fluctuations, potentially increasing market volatility.

However, options traders currently do not seem to be preparing for such a scenario, as indicated by the Volmex BVIV index, which measures the expected 30-day price swings of BTC and has dropped to three-month lows below an annualized 42%. This calm outlook from traders is notable, especially with the Fed's upcoming interest rate decision.

The policy statement's stance on energy market disruptions and inflation could impact the market, potentially leading to a pause in rate reductions or even rate increases, which would cap gains in risk assets. Analysts at Marex note that the bitcoin market is cautious and illiquid, with the next significant move likely to be influenced by macroeconomic factors rather than crypto-specific news. The recent decision by the UAE to leave OPEC and OPEC+ has introduced uncertainty into energy politics, making risk assets more sensitive to headlines.

Bitcoin's price has been relatively calm, trading near $77,800 with a 1% increase over 24 hours, while other cryptocurrencies like ether, solana, and XRP have seen similar gains. The CoinDesk Memecoin Index has led the market with a 3% increase, followed by the Computing Select Index with a 2.7% gain.

In traditional markets, the Dollar Index remains below 100, lacking momentum, while yields on the 10- and two-year U.S. Treasury notes continue to rise slowly. The close relationship between the 10-year U.S.

Treasury note yield and WTI crude prices suggests that oil price volatility could have a significant impact on all assets, including cryptocurrencies.