Bitcoin Rally: BTC Tops $24K

Bitcoin is in rally mode after several weeks of gloom. At the moment, Bitcoin is trading above $24,000 – the first time since the 2nd week of June. The rise in valuation is being joined by other cryptocurrencies as well as traditional securities.

Marcus Sotiriou, an Analyst at digital asset broker GlobalBlock (TSXV:BLOK) asks if there may be a BTC squeeze in the making.

“Bitcoin’s strength has persisted after yesterday’s market commentary, which discussed the potential for the crypto market to continue its rally, partly because of the Coinbase Premium Gap,” says Sotiriou. “Over the past day, we have seen over $500 million in ETH short liquidations, and almost $1 billion in total crypto short liquidations. Data from Glassnode shows that ETH Open Interest as a percentage of market cap has declined significantly, whilst BTC Open Interest as a percentage of market cap remains elevated.”

Sotiriou notes that open interest in futures contracts can give an indication of the amount of leverage in an asset. Declining open interest means that the market is liquidating and implies that the prevailing price trend is coming to an end.

“As BTC’s open interest is yet to see a noticeable drop, BTC could be primed for a huge move if short positions get squeezed.”

Sotiriou also believes that positive progress in regulation is helping. Meanwhile, the SEC is dealing with multiple crypto debacles including the collapse of TerraUSD/LUNA and the Celsius bankruptcy.

Of course, a day doesn’t necessarily indicate a long term trend and markets are still dealing with raging inflation and rising interest rates. It could be that the “other shoe has dropped” and the bad news in the crypto contagion worlds is out and factored into prices.

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