Bitcoin's rise above $20,000 yesterday was a surprise for the bears: $552 million worth of short positions were liquidated during the day. In total, sellers' losses for all instruments amounted to $1.13 billion.
Image source: coinglass.com
The latest rise should cheer up investors because the stress level measured in coins at a loss is close to all-time highs. According to Glassnode, over 8 million BTC were bought at higher prices (based on the 30-day moving average).
Image source: glassnode.com
Historically, October has been a favourable time for Bitcoin, with seven out of nine years showing gains of between 10% and 61%. And with the latest increase, there's every chance of this October once again securing the title of Uptober.
Image source: coinglass.com
Positive factors for Bitcoin include both intra-network and macroeconomic ones. The former includes the continued outflow of coins from cryptocurrency exchanges to cold wallets, resulting in the aggregate balance falling to January 2018 levels.
Image source: glassnode.com
Macroeconomic factors include the devaluation of several national currencies and tighter financial supervision. For instance, after Xi Jinping's re-election to a third term, the yuan and the Chinese stock market collapsed, and interest in cryptocurrency is trending again.
Image source: StormGain.com
China had previously pursued a tight financial policy aimed at reducing capital outflows. For example, citizens can't withdraw more than 100,000 CNY ($13,800) from their account or card abroad in a one-year period. Transfers from China overseas are even more restricted, and amounts of $10,000 or more are likely to be blocked by banks with a requirement to provide additional transaction details.
Xi Jinping's re-election hints at the further tightening of financial supervision in a country with a total of $55 trillion in deposits. This is more than double the US GDP in 2021 ($23 trillion).
StormGain Analytics Team
(a cryptocurrency trading, exchange and storage platform)