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Bitcoin Back Above $26,000 As Cryptos Make A U-Turn Higher

Cryptocurrencies have been showing signs of weakness since the middle of July, with the market maintaining a bearish tone characterized by lower lows in cryptocurrency prices. Bitcoin has been breaking the support levels, although the $26,000 zone held for about a month and we also saw a jump at the end of August on optimism in most digital coins following a recent legal victory by Grayscale against the U.S. Securities and Exchange Commission (SEC). But, the resulting rally proved to be short-lived, and the bearish momentum returned.

Yesterday, we saw another dip in the crypto market and Bitcoin (BTC) experienced a significant drop to $25,000, which reached the Stop Loss (SL) target for the buy BTC signal. The $25,000 zone is considered a major support and resistance area in the Bitcoin market. It’s an important psychological level, so we were observing whether it would hold or if the decline continued further, which would open the door for more losses.

The decline came after the sentiment turned negative on rumors about the FTX bankruptcy. Currently, there are approximately $3.4 billion worth of cryptocurrency assets held by FTX, and these assets are waiting to be liquidated. The liquidation is expected to occur in batches, with each batch ranging from $100 million to $200 million. The final decision regarding this liquidation process is pending and is scheduled to be determined by the Delaware Bankruptcy Court on September 13, which falls on a Wednesday.

The outcome of this decision will have significant implications for the cryptocurrency market and for the individuals or entities involved in FTX. The liquidation of such a substantial amount of cryptocurrency assets can impact market prices negatively, as well as investor sentiment, and it will be closely watched by participants in the cryptocurrency industry.

But we have seen a quick reversal today, and BTC increased more than $1,000, reaching $26,280. This surge in value appears to have been triggered by comments made by BOE (Bank of England) member Breeden. He suggested that it would be more appropriate to regulate cryptocurrencies within the financial services sector rather than categorizing them as gambling.

Before the significant price jump, there were some relatively minor buy orders. However, the substantial spike in Bitcoin’s price occurred right at the moment when BOE policymaker Breeden made his remarks. This sudden increase in Bitcoin’s price suggests that buyers who see potential in the cryptocurrency market are actively stepping in to make purchases. The $25,000 price level appears to be a critical point of support, and investors and traders are closely monitoring whether it holds as a significant level.

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Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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