Bitcoin unexpectedly broke its usual cycle in recent weeks, reaching $79,000. Bitcoin, which generally lost value in previous months after the STRC dividend distribution, followed a different path this time and gained over 4 percent in a short time. Especially the concentration of short positions in derivative products and spot purchases in the US stock markets stood out among the main factors that accelerated the rise.
Short positions squeezed, rise strengthened
Financing rates in futures transactions have been below zero for a long time. This shows that short positions opened with the expectation of a decline in Bitcoin pay additional costs to hold their positions. In this environment where the price was moving upwards, the closing of positions by traders who suffered losses accelerated the rise.
The fact that the spot price on the US-based crypto exchange is higher than on similar platforms abroad indicates that strong institutional demand continues. The fact that this trend did not change even after the dividend period shows that spot investments did not decrease.
This picture gave the impression that the market had just entered an early short squeeze phase. Considering the negative trend in financing rates and the stability in spot purchases, it led to comments that the rise may continue in the coming days.
Strategy, one of the large companies investing in Bitcoin and standing out in terms of market value, was at the center of this rise. The company’s stock, called STRC, which frequently pays dividends, is used as an important tool in purchasing crypto assets, thanks to its pricing close to $ 100. Finally, it was announced to the public that the company recently purchased 34,164 Bitcoins. Chairman of the Board of Directors Michael Saylor aims to promise shareholders a more balanced price course by bringing forward the proposal to increase STRC dividend payments to twice a year.
Market sentiment is recovering
The fear and greed index has been showing signs of recovery since last week. While the index was at the extreme fear level with 23 points last week, it increased almost threefold to 32 points. Still, the index remains below the neutral threshold of 40 points.
From a technical perspective, short-term investors are still at a loss and the price is below the 200-day moving average. Ongoing negative financing in the derivatives market supports the outlook reminiscent of mid-2022. However, despite the negative outlook, the moderate recovery in investor sentiment is noteworthy.
Unexpected support from the USA to the markets
Political winds from the USA were also effective in the background of Bitcoin’s rise. Speaking recently at the Defense Committee of the US Congress, US Indo-Pacific Command Admiral Samuel Paparo described Bitcoin not only as a financial asset but also as an important tool for modern computer science. Paparo emphasized the potential offered by proof-of-work systems in cyber security and said that Bitcoin can undertake strategic functions other than value transfer.
Admiral Paparo’s comments recalled statements made in 2023 by US Space Force officer Jason Lowery, who suggested that proof-of-work was a fundamental element in cybersecurity. In addition, in recent months, new legislative proposals have been brought to the agenda in Congress that encourage the production of mining equipment in the USA and strengthen the country’s Bitcoin reserve strategy. The USA already has the world’s largest Bitcoin government reserve and holds most of the total global mining power. However, supply chain concerns remain alive as mining devices are externally dependent.
The market is at a critical point in terms of determining direction in the short term. According to analysts, Bitcoin may reach its weekly close above $79,200 and the upward momentum may strengthen. However, under current conditions, prices are expected to remain horizontal before this approval comes.
