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Bitcoin’s price trajectory has once again taken a sharp upward turn, recording its rise above the $28,000 mark for the first time since its notable rise on August 29. This earlier jump may be attributed to Grayscale’s victory over the US Securities and Exchange Commission (SEC). ) in their legal battle over converting Bitcoin Trust (GBTC) into a spot ETF.
In a stunning display of Bitcoin’s notorious volatility, Bitcoin saw its price surge by more than $800 in the space of 5 short minutes on Sunday evening, rising from $27,250 to a peak of $28,053 between 6:15 and 6:20 PM ET.
Why did the price of Bitcoin rise today?
One of the primary catalysts behind this dramatic price movement, as… specific By respected cryptocurrency analyst Byzantium General, it is a phenomenon known as a “short squeeze.” In the world of futures trading, a short squeeze is characterized by a rapid increase in price, forcing traders who have bet against the price of the asset (short sellers) to buy it to prevent further losses. This reactive buying can intensify the asset’s price jump.
During yesterday’s rally, a staggering $392 million worth of Bitcoin short positions, or about 7.7% of the total open interest in the market, were quickly liquidated. The Byzantine general spoke further about the market’s resilience, noting that Bitcoin’s open interest quickly rebounded with a $350 million increase, humorously indicating the market’s willingness to embrace such a volatile maneuver again: “The whole market was actually like ‘I’ll do it.'” “Do it again.”
Cryptocurrency analyst Fabian D. I went deeper Analysis by noting the complex interplay between the evicted short sellers and the potential for Bitcoin’s value to rise further. He noted that Bitcoin’s upward trajectory from this point depends on two key factors: the entry of spot buyers driven by fear of missing out (FOMO) and whether short sellers decide to re-establish their positions.
Fabian also hinted at an absence of institutional buying activity in the week leading up to this rally, but stressed the importance of monitoring premium prices on platforms like Coinbase and CME when the market opens today. Adding to the complexity of the market landscape, Fabian pointed to two imminent events: the anticipation surrounding future ETF flows, and a court hearing related to the Celsius platform, which may refocus attention on creditor distributions.
Digging into deeper analysis, quantitative trader Skew highlighted the dynamics at play on platforms like Binance and Bybit. He stressed that the recent rise in prices was not entirely unexpected, especially given the marked shift away from short positions and the strong standing demand that drove the rally.
Looking at Bitcoin‘s total CVDs and deltas, he also noted: “Mostly we see only selling pressure at the moment. Prices fall as Perp CVD declines and Perp sell delta rebounds. The next step that decides the fate of this whole move is immediate.”
Highlighting the evolving market dynamics, Scio noted that the BTC Binance spot market displays a remarkably wide order book with a significant amount of available liquidity and rest. He concluded that such a setup could lead to another clear price reaction. “Increased demand liquidity on spot order books; this means there is more volume needed for spot buyers to clear $28,000-$29,000 (shifting market structure),” he warned.
It is also interesting to note that the price action was already visible on the daily chart. As shown in recent Bitcoin price analysis, the price broke the downtrend line (black) established in mid-July last Thursday. While the trend line was successfully retested on Friday and Saturday, confirming the bullish momentum, the expected bounce occurred yesterday.
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