Bitcoin is up today, rising over 5% with a sharp upward candle that sent the price to a September high of over $26,500 after hitting a three-month low. Bitcoin (BTC) reaching over $26,000 was seen as a key level for traders and analysts.
Let’s look into the reasons why Bitcoin’s price is up today.
Institutional interest in Bitcoin boosts market sentiment
After Judge Neomi Rao sided with the Grayscale Bitcoin Trust in its case against the United States Securities and Exchange Commission (SEC) on Aug. 29, many large institutions filed for exchange-traded funds (ETFs).
Institutional interest in Bitcoin from companies like BlackRock and Fidelity Investments is growing. While both institutions had BTC spot ETF approvals delayed on Sept. 2, the $1.5 trillion asset manager Franklin Templeton filed with the SEC for a spot Bitcoin ETF on Sept. 12.
To date, the SEC has refused to approve a spot Bitcoin ETF, despite numerous applicants, including BlackRock, Fidelity, Cathie Wood’s ARK Invest and 21Shares, which has filed for approval three times.
BlackRock is the world’s largest asset manager, with over $8.5 trillion in assets under management. The firm will also utilize Coinbase to custody the BTC in the trust, according to the filing with the SEC.
The SEC’s next deadline for deciding on the application is Oct. 16.
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Bitcoin on exchanges continues to drop
Coinciding with Bitcoin’s price gains, the BTC supply on exchanges continues to remain below the 2023 peak, which occurred May 1. Exchanges have shed over 200,000 Bitcoin since then.
The market perceives coins leaving crypto exchanges as a bullish signal, given traders typically withdraw their BTC when they want to hold it in self-custody long term.
Interestingly, on-chain data shows that despite the elongated bear market, large swaths of Bitcoin investors are positioning for a BTC price rally, as the number of wallets holding 0.1 BTC reached an all-time high of 12 million on Sept. 12.
Liquidations could be sending the Bitcoin price higher
With Bitcoin continuing to leave exchanges, liquidations tend to have a strong impact on price. In the past 24 hours, over $38.1 million in BTC shorts have been liquidated, with over $26.4 million in shorts being liquidated in a 12-hour timeframe.
Despite the short-seller losing streak, 53% of the futures market remains short on Bitcoin. With such a high ratio remaining skewed short, a potential opportunity for a short squeeze could happen, leading to greater Bitcoin price upside.
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While Bitcoin is showing some bullish momentum in the short term after the Franklin Templeton ETF application and short liquidations, the Bitcoin Fear and Greed Index shows the market is still fearful, down over 24 points compared to the previous month.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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