Bitcoin’s Rally to $28K Spurred by Largest Short Squeeze This Month

Bitcoin (BTC) surged above $28,000 Tuesday afternoon in the largest short squeeze this month.

The largest cryptocurrency by market capitalization jumped to as high as $28,150 in a few hours after trading flat around $26,800 for most of the day, CoinDesk Indices data shows. It more recently pared some of its gains, dropped to around $27,900, but remains up 5.2% over the past 24 hours to outperform most other digital assets.

Traders who positioned for prices to drop lost some $36.6 million in liquidations over the past 24 hours, according to CoinGlass data. This was the largest amount of short liquidations since May 28.

The price surge comes after a number of large, financial services institutions have announced major crypto initiatives, brightening a mood grown sour in recent weeks from increasing U.S. regulatory pressure, including lawsuits against crypto exchanges Binance and Coinbase.

Read more: BlackRock’s Bitcoin ETF Would Be a Big Deal

Banking giant Deutsche Bank said Tuesday that it had applied for a digital asset custody license in Germany. Crypto exchange EDX Markets, which received funding from financial heavyweights including Charles Schwab (SCHW), Citadel Securities and Fidelity Digital Assets, started offering trading with BTC and ether (ETH) on the same day. Last week, investment management giant BlackRock (BLK) surprised markets by filing for a spot BTC exchange-traded fund (ETF).

“The bitcoin rally certainly is correlated with the news of all these larger traditional financial institutions looking to get serious exposure to the digital asset ecosystem,” Brent Xu, CEO and co-founder of decentralized finance (DeFi) bond market platform Umee. “It’s clear that BlackRock, Fidelity and the others have client bases that want to invest in BTC and other crypto assets by way of ETFs and other more traditional investment vehicles.

“This news has served to somewhat blunt the relatively bleak regulatory environment that the United States finds itself in, and it also seems to suggest that these big players are wanting a regulatory environment that is both clearer and more fair than what exists right now,” Xu added.