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▲ Bitcoin (BTC)/AI Generated Image
A barrage of negative factors hit simultaneously, including the rejection of a regulatory bill by the U.S. Congress and central bank interest rate hikes. Furthermore, the worsening investment sentiment in AI, stemming from big tech companies, compounded the situation. However, Bitcoin (BTC) showed a completely different trajectory. It broke through $87,000, its highest level in 8 months, swallowing up a large amount of funds that had bet on a decline.
Guy Turner, host of the cryptocurrency YouTube channel Coin Bureau, stated in a video uploaded on September 22nd (local time), "The pessimistic factors that bearish investors desired materialized without exception over the past week, yet Bitcoin surged as if mocking all the bad news." The U.S. Senate's cryptocurrency market structure bill, which had been two years in the making, was rejected with 49 votes in favor and 50 against, pushing virtual asset companies back into regulatory uncertainty. On that day, Coinbase's stock price plummeted by about 8%, and Circle's by about 10%.
Subsequently, newly appointed Federal Reserve (Fed) Chairman Kevin Warsh raised the benchmark interest rate by 0.25 percentage points, the U.S. 10-year Treasury yield exceeded 5%, and the Bank of Japan also raised interest rates to their highest level in 31 years, fueling fears of tightening. In addition, safety concerns raised by Dario Amodei of Anthropic were echoed by Sam Altman and Elon Musk, and news of OpenAI's withdrawal of its IPO within the year led to a more than 5% drop in the AI-related semiconductor index, casting a shadow over risk assets in general.
Even as macroeconomic and policy environments tightened around virtual assets, Bitcoin embarked on an explosive rally, forcing the liquidation of bearish positions in the derivatives market. Over the past 24 hours, the total amount liquidated across the virtual asset market exceeded $1 billion, with approximately 84% of that, or $843 million, coming from short positions. Notably, over $300 million in liquidations poured in during the steepest hour of the surge alone, with 97% of the liquidated volume during that period concentrated in short-selling contracts. Turner explained, "Approximately 130,000 accounts that had bet on a collapse after encountering negative news found themselves trapped in a forced buy-liquidation swamp, directly fueling the upward rally." He added, "There was also a case where a single wallet experienced four consecutive short position liquidations over 14 hours, losing 375 BTC (approximately $32.5 million)."
Institutional investors remained unfazed by the political confusion in Washington and demonstrated strong spot buying. Strategy, which has led corporate Bitcoin investments, additionally purchased 950 BTC for $75 million even amidst the bill's rejection. The U.S. Bitcoin spot ETF market saw a temporary outflow of $450 million on the day of the vote, but absorbed the shock with $433 million re-entering within just three trading days. Morgan Stanley's Bitcoin ETF also continued its net inflow for 20 consecutive trading days, proving robust real demand from institutional funds. Blockchain network operations and exchange systems are functioning normally regardless of Congress's legislative failure, and the market is evaluated as having already developed its own resilience to survive even without institutional codification.
Comparing technical indicators and past historical crisis periods, Bitcoin continues to defy macroeconomic laws. Bitcoin rebounded 13% in just four days from below $75,000, and for the first time in 45 weeks, the weekly candle closed above the 50-week moving average. Even after the surge, futures open interest increased by approximately 7.5% to $156 billion, confirming strong market demand rather than a leverage collapse. This repeats a history where, at moments of extreme fear, such as China's complete ban on mining in 2021, FTX's bankruptcy in 2022, and U.S. regional bank failures in 2023, the market formed a bottom and surged to all-time highs.
Turner emphasized, "A market that only reacts to good news is fragile, but a market that overcomes a continuous barrage of bad news and soars proves a robust holder base," highlighting that virtual assets are dominating the market through their own momentum despite regulatory uncertainty and monetary tightening.
[Article Key Summary]
-Despite negative factors like the rejection of the U.S. cryptocurrency market structure bill, the Fed's interest rate hike, and a slowdown in AI investment, Bitcoin broke through $87,000.
-Short positions worth $843 million were forcibly liquidated within 24 hours, accelerating Bitcoin's price increase.
-Strategy's additional purchase of 950 BTC and continuous ETF inflows helped Bitcoin successfully settle above its 50-week moving average for the first time in 45 weeks.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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