Bitcoin’s price is experiencing a notable surge today, marking a 5% increase with a strong upward movement that propelled the price to a two-week high above $28,000. This sudden price jump comes in the wake of United States Court of Appeals Circuit Judge Neomi Rao’s decision to side with the Grayscale Bitcoin Trust (GBTC) in its legal battle against the U.S. Securities and Exchange Commission (SEC).
The court’s ruling has amplified the prevailing institutional interest in Bitcoin, particularly evident in companies like BlackRock and Fidelity Investments. Both of these entities are set to receive responses regarding their proposed BTC spot exchange-traded funds (ETFs) on September 2nd.
The rally in Bitcoin’s price on August 29th was triggered by Judge Rao’s decision to vacate the SEC’s order to deny the GBTC spot ETF due to concerns of “fraud.” Although this decision doesn’t grant approval to the spot ETF, Rao stated that “Grayscale’s petition for review be granted and the Commission’s order be vacated, in accordance with the opinion of the court.”
The SEC’s consistent denial of a spot Bitcoin ETF, despite multiple applicants, including major players like BlackRock, Fidelity, Cathie Wood’s ARK, and 21Shares, has been a point of contention. BlackRock, boasting over $8.5 trillion in assets under management, plans to utilize Coinbase for BTC custody in its trust. The SEC is expected to make a series of ETF-related decisions starting in September.
Observing the trend of coins leaving crypto exchanges is often seen as a bullish signal, as it indicates investors are moving their BTC to self-custody for the long term. Notably, on-chain data has shown that exchanges have been shedding Bitcoin since May 18, 2023. This implies that many Bitcoin investors are positioning themselves for a potential price rally, even amidst the prolonged bear market of 2023.
As more Bitcoin leaves exchanges, the cushion for liquidations diminishes, leading to increased market volatility. Over the last 24 hours alone, more than $46.5 million worth of BTC shorts have been liquidated, contributing to a total of over $100 million across the entire crypto market.
Despite the losses faced by short-sellers, 48% of the futures market maintains a short position on the Bitcoin price. This skewed ratio suggests the possibility of a short squeeze, which could result in further upside potential for the Bitcoin price.
While the recent Grayscale ruling and short liquidations are creating a bullish momentum for Bitcoin’s price in the short term, the Bitcoin Fear & Greed Index indicates that the market sentiment remains fearful, with a decrease of over 13 points compared to the previous month.
As always, it’s important to note that this information is not financial advice, and individual investors should conduct their own research and analysis before making any trading decisions.