Bitcoin soared above $84 thousand: why the cryptocurrency sharply went up
Bitcoin sharply accelerated its growth and on September 21 broke the $84 thousand mark. At that moment, the largest cryptocurrency was trading above $84.7 thousand. A few days earlier, the rate had dropped to around $76 thousand, so from the local minimum, bitcoin added more than 11%.
The latest surge was especially impressive: after relatively calm trading around $81–82 thousand, quotes rose by several thousand dollars in a short time. Following bitcoin, the largest altcoins are also rising in price. Market growth is supported by several factors at once.
First, investors received a positive signal from US regulators. The SEC announced an Innovation Exemption regime, which should simplify experiments with trading tokenized stocks and using blockchain infrastructure in the traditional financial market. The decision itself does not directly concern bitcoin, but market participants perceived it as another sign of the gradual integration of crypto technologies into the US financial system.
Second, money began to return to American bitcoin ETFs again. After a large outflow at the beginning of the week, on September 17 and 18, the funds received a total of about $484 million in net inflows. This is important for the market, since purchases through ETFs create additional demand directly for bitcoin.
The third factor is a short squeeze. After the recent decline, many traders expected the decline to continue and opened short positions. When bitcoin unexpectedly reversed upward, these positions began to be liquidated en masse. To close a short, one must buy the asset, so forced purchases further drive the price up. As a result, the initial growth could turn into a chain reaction.
Cryptocurrencies are also supported by an overall increase in investors' risk appetite: stock markets look more confident, and the decline in oil prices somewhat reduced inflation concerns.
What will happen next
After such a rapid jump, the main question is whether bitcoin will be able to hold above $84 thousand when the effect of short position liquidation weakens.
On the one hand, the market is supported by ETF inflows and an improving regulatory background. On the other hand, US monetary policy remains tight, and high interest rates traditionally put pressure on risky assets.
Therefore, further movement will depend not so much on the closing of bearish bets, but on whether real purchases of bitcoin continue after the current surge.
