Bitcoin experienced a classic “short squeeze,” reaching new highs for the month before reversing direction. Over $30 million in BTC shorts were liquidated as the digital currency’s price reached a new high for September.
In the backdrop of these market fluctuations, JPMorgan, the top-ranking U.S. bank in terms of assets, disclosed its initiation into crafting a blockchain-driven digital deposit token aimed at facilitating cross-border transactions and settlements. The bank has, reportedly, set up a majority of the essential foundational structure required for the token’s operation.
Nevertheless, before the token’s official launch can take place, it awaits the green light from U.S. regulatory bodies, as per a recent report by Bloomberg on Friday.
The most substantial single liquidation order was recorded on Bitmex, a popular cryptocurrency exchange, where a position valued at $5.15 million in XBT was liquidated.
On September 7, Bitcoin had an upside momentum that peaked above $26,400 following the daily close. However, this was followed by a downturn that brought BTC/USD full circle, settling below the $26,000 mark at the time of writing.
Monitoring resource reported that short liquidations on September 7 amounted to $30 million, with the data for September 8 still pending. The sudden surge and subsequent decline led to a scenario where “shorts got hunted,” as noted by popular trader Skew during an overnight market coverage on X.
$BTC Binance & Bybit Open Interest
Shorts got hunted as expectednote the OI added here with small price reaction and decreasing perp bid delta, this implies more shorts scaling into price on this second drive higher https://t.co/OULNlQrQof pic.twitter.com/X1hNlvjbdc
— Skew Δ (@52kskew) September 7, 2023
The market witnessed a significant reclaiming of lost ground from August, with Bitcoin successfully breaking above the September monthly open after numerous tests. The current retest phase is crucial as it will determine whether it can offer as much support as it previously encountered resistance.
The cryptocurrency community is keenly watching to see if Bitcoin can maintain a “green” September, defying the historical trend where September often sees a nearly 10% downside in BTC price.
Crypto Tony, a noted analyst, advised traders to watch the $26,600 line, emphasizing that crossing this threshold is vital for further positive momentum. Despite the overnight rally originating from the $25,600 range low, the lack of follow-through to the range highs has left the market stuck mid-range.
As Bitcoin returns to familiar territory from the first week of September, it continues to hold the 200-day exponential moving average (EMA), currently standing at $25,674.
Michaël van de Poppe, founder and CEO of trading firm Eight, suggested that the market is undergoing the “final” BTC price drop in this cycle, drawing parallels with the 2015 market cycle influenced by new participants, including institutions.
Despite the recent uptrend, analysts predict that Bitcoin may not sustain its current level. The digital currency rose to $26,451 in the late US session on Thursday. However, it is expected that BTC might revisit the $21,000 mark due to multiplying sell signals ahead of the US Consumer Price Index (CPI) announcement.
