Sep 20, 2023

Binance Legal Battle Boosts Bitcoin Price to $28K

The ongoing legal dispute between Binance, a cryptocurrency exchange, and the U.S. Securities and Exchange Commission (SEC) took an unexpected turn on Sep. 18. Magistrate Judge Zia M. Faruqui refused the SEC’s demand for access to Binance.US’s systems. Instead, the Federal Magistrate proposed that the SEC should formulate particular discovery requests. Although this ruling merely…

Bitcoin Price Eyes $28K as Binance Legal Battle Spurs Chainlink Crypto Bullish Momentum
Bitcoin price eyes $28K as Binance legal battle spurs bullish momentum

The ongoing legal dispute between Binance, a cryptocurrency exchange, and the U.S. Securities and Exchange Commission (SEC) took an unexpected turn on Sep. 18.

Magistrate Judge Zia M. Faruqui refused the SEC’s demand for access to Binance.US’s systems. Instead, the Federal Magistrate proposed that the SEC should formulate particular discovery requests.

Although this ruling merely postponed the need for Binance to show the separation between Binance.US’s custody solution and Binance International, the market reacted positively.

Bitcoin (BTC) rose to its highest level in three weeks, breaking above the $27,000 resistance. Traders are now asking if the rally was backed by leverage or genuine spot buying demand.

In this case, metrics related to Bitcoin derivatives could potentially provide the answer.

Investors must wait three weeks for further rulings

Judge Faruqui scheduled a follow-up hearing for Oct. 12 and called upon the involved parties to submit a status report before the event, as reported by Yahoo Finance. Despite the SEC’s potential setback, this could potentially increase the risks for Binance.

Binance’s founder and CEO, Changpeng “CZ” Zhao, continues to insist that Binance.US has never utilized Binance International’s custody solutions, despite a document from Binance.US on Sep. 15 indicating otherwise. Nevertheless, the SEC has yet to present any clear evidence of Binance attempting to deceive the court.

Regardless of the current lack of reliable information from Binance, Bitcoin bulls can be optimistic for the next three weeks, with no anticipated changes until the upcoming court hearing.

To gauge the increasing optimism among professional traders, let’s examine Bitcoin’s margin and derivatives metrics such as Chainlink Crypto, EOS Crypto, Deso Crypto, Crypto FTX, and FXStreet Crypto.

Bitcoin margin, options show clear path toward $28,000

Margin markets offer investors the ability to increase their exposure through stablecoin borrowing, and provide valuable insights into the positioning of professional traders. By measuring the ratio of Bitcoin borrowers speculating on a cryptocurrency’s price decline, traders can assess market sentiment and determine whether calls (buys) or puts (sells) are favored.

Recent data reveals that the margin-lending ratio for OKX traders has dropped to its lowest point in three months, standing at 19x, down from 27x just a week ago. This suggests that the dominance of leverage long positions has diminished, although the current ratio still favors the bulls.

The put-to-call ratio for Bitcoin options volume has recently shifted from favoring put options at 1.50 to a balanced 1.04 level on Sep. 20, indicating a reduced interest in protective puts. Since Sep. 18, BTC options volume has either been neutral or slightly favored put options, suggesting that professional traders were caught off-guard by the price rally above $27,000.

Both Bitcoin margin and crypto.com coins options markets indicate a balanced demand between long and short positions. This could mean that whales are accumulating regardless of price, as spot orders hint at buying support.

Now, BTC and other crypto bulls have a window of three more weeks, until Oct. 12, when the Federal Judge will convene another hearing and potentially issue orders that could pose challenges for Binance.US. In the meantime, a Bitcoin price rally above $28,000 is certainly on the table.

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