As yet another eventful day in the digital currency markets took place, traders kept a sharp eye on the movement of Bitcoin (BTC). With the price bouncing around $27,000, potential record highs for the month were in sight but the digital asset struggled to consolidate its gains. Some attribute this activity to a classic “short squeeze” – a rapid increase in the price of a stock primarily due to technical factors in the market rather than underlying fundamentals.
Following a transient trip past the paramount $27,000 mark, BTC’s robust grit wasn’t able to secure a new high this month, peaking at $27,300. It then returned to strengthen up its position, displaying a notable 4% increase against week’s low at the time of writing.
As the situation was carefully being evaluated on low timeframes (LTFs), popular trader Skew reported that derivatives markets drove much of the upward push. Profit-driven traders commonly known as ‘perpetuals’ were reportedly at the helm of this rally suggesting higher weightage vested on such traders. However, Skew indicated that $27,200 remained a rejection point, hinting that volatility next week could swing both ways.
BTC’s volatility generated significant heat among short sellers as data from CoinGlass revealed liquidations reaching a staggering $22 million on September 28 – the largest single-day tally in ten days. In a broader context, Moustache, a renowned pseudonymous trader and analyst highlighted that BTC was again back above the SMA 20 line: a potential major support reclaim. If Bitcoin were to close the month above this line, it could spell quite a bullish signal for the cryptocurrency.
The market eventfulness extended into the legal realm as well. Binance is currently embroiled in a lawsuit with the United States Securities and Exchange Commission. In conjunction with these occurrences, Circle, the company behind USDC, weighed in on the debate, arguing that assets pegged to fiat currencies, such as Binance USD, are not securities. This contention is based on the fact that individuals who purchase these assets do not expect profits from them.
In contrast, the SEC has extended its claim to non-fungible tokens, often regarded as unique collector’s items in the digital space. They’ve argued these too fall under the classification of securities. This development surely adds a new layer of complexity to the overall narrative of the digital currency markets. It’s crucial current and future crypto-enthusiasts pay keen attention to such evolutions.
To sum up, the late September rally and the legal dust-up present a multifaceted image of the digital currency landscape. Continued observation and insightful interpretation could pave the way for informed decision-making and a conducive environment for digital currency enthusiasts.
Source: Cointelegraph
