BTC Price Maintains Strength After Classic "Short Squeeze"
Bitcoin (BTC) experienced a price bounce around $27,000 on September 29th as the challenge to month-to-date highs pushed BTC price action upwards. This came after a "short squeeze", resulting in the largest cryptocurrency attempting to hold its gains. However, despite surpassing the $27,000 mark the previous day, Bitcoin bulls were unable to establish a new peak for September. BTC price consolidated around $27,300 on Bitstamp, showing a 4% increase from the week's low.
Derivatives Markets Drive BTC Price Upside
Analysts suggest that the recent upside movement in BTC price was mainly driven by derivatives markets, with spot traders selling at the highs. Skew, a popular trader, noted that there was spot absorption around the $27.2K level, making it an important area for spot buyers to surpass. He also mentioned that the increase in price was driven by short liquidations and strong perpetual futures bids. Going into the next week, Skew anticipates that the market will "hunt both sides of the book."
Short Squeeze Leads to $22 Million in Liquidations
Monitoring resource CoinGlass reported that short positions were getting squeezed, resulting in $22 million in liquidations on September 28th, which was the highest single-day total in ten days.
20-Month Simple Moving Average Could Signal Bullish Trend
A pseudonymous trader and analyst known as Moustache on social media highlighted the significance of the 20-month simple moving average (SMA) as a potential support level. If Bitcoin closes above this line, Moustache argued that it would invalidate the previous bearish sentiment in August and potentially signal an incredibly bullish trend. Historical data suggests that the 20-month SMA has acted as definitive support after reclaims, holding until BTC/USD reaches a new all-time high.
Please note that this article does not provide investment advice or recommendations. Readers should conduct their own research and exercise caution when making investment decisions.
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