Bitcoin experienced a bounce around $27,000 on September 29th as the cryptocurrency attempted to reach new highs for the month. Data from Cointelegraph Markets Pro and TradingView showed that Bitcoin was trying to maintain its gains after a “short squeeze” occurred. Although the digital currency did surpass the $27,000 mark the day prior, it was unable to establish a new peak for September. However, BTC price consolidation was still up 4% compared to the week’s lowest point.
Popular trader Skew analyzed the situation on low timeframes and noted that the upward movement was driven by derivatives markets, with spot traders selling at the highs. He highlighted that there was spot absorption around the $27.2K price level, indicating its importance for spot buyers. Skew also mentioned that short liquidations and a strong perpetual future bid were responsible for driving the price up.
Furthermore, monitoring resource CoinGlass revealed that short positions were being squeezed, with liquidations reaching $22 million on September 28th. This was the highest single-day tally in the past ten days, suggesting increased buying pressure and potential short-term volatility in the market.
Looking ahead, the cryptocurrency market is likely to “hunt both sides of the book” as $27,200 remained a rejection point on the day, especially with the Wall Street open looming. Traders and investors will need to closely monitor the market in the coming days to gauge its direction.
In terms of the monthly close, pseudonymous trader and analyst Moustache suggested that Bitcoin’s ability to close above the 20-month simple moving average (SMA) could have longer-term bullish implications. If the cryptocurrency closes above this line, it could signal that the previous month’s price action was a fakeout and could lead to further upside momentum.
Historically, the 20-month SMA has marked definitive support after reclaims and has held until Bitcoin reached a new all-time high. Therefore, a monthly close above this line could indicate a positive trend for the digital currency.
It is important to note that this article does not provide investment advice or recommendations. Investors should conduct their own research and analysis before making any trading decisions, as cryptocurrency investments carry inherent risks.
