Bitcoin (BTC) has surged above the $28,000 mark, reaching its highest prices in over a month. Analysts attribute the gains to several factors, including optimism surrounding exchange-traded funds (ETFs) and historical seasonality.
Last week, traders at Japanese exchange Bitbank were already anticipating Bitcoin reaching the $28,000 level. This level has previously acted as a significant support level during bull markets and will likely be a key price level to watch in the coming weeks as it potentially becomes a level of resistance.
In addition to Bitcoin’s increase, other cryptocurrencies have also experienced gains. Ether (ETH) surpassed $1,700, while BNB and Cardano (ADA) added 3.3% and Polygon (MATIC) rose by 5.5%. Solana (SOL) tokens led the major gains with a 14.5% increase, driven by a renewed sense of optimism for the network among certain traders.
The rise in Bitcoin and Ether prices may have been influenced by short liquidations on crypto-tracked futures. Data reveals that approximately $94 million in bearish bets against rising prices were impacted on Sunday, resulting in a “short squeeze.” This occurs when there is a shortage of supply and an excess of demand for a stock, prompting short sellers to purchase stocks to cover their short positions. The majority of liquidations occurred on the crypto exchange OKX, with approximately 30,000 bearish bets being liquidated.
Traders have also highlighted historical seasonality as a contributing factor to the recent gains. October is typically perceived as a bullish month for cryptocurrencies, with Bitcoin recording monthly losses in October only twice since 2013. This has led to the nickname “Uptober” within the cryptocurrency community.
The recent boost in crypto markets can also be attributed to the expectation of increased demand in the short term due to the potential approval of a formal Ether futures exchange-traded fund (ETF). Financial giant VanEck has proposed this ETF, and some analysts estimate a 90% chance of approval in the first week of October.
Overall, Bitcoin’s rise above $28,000, coupled with the gains of other cryptocurrencies, demonstrates the ongoing optimism and bullish sentiment in the crypto market. Factors such as ETF expectations and historical seasonality have contributed to this recent surge. As the market continues to evolve, investors and traders will closely monitor these developments to inform their strategies.