Binance Legal Dispute Spikes Bitcoin; Balance in Margin and Options Markets Forecasts a Bright Future
Summary:
The recent legal dispute between Binance and the SEC has seen Federal Magistrate Judge Zia M. Faruqui suspend the SEC's access request to Binance.US's systems, which resulted in Bitcoin reaching a three-week high. Upon this dispute and upcoming rulings, market sentiments lean to a brighter future for Bitcoin for the next three weeks. Traders, however, displayed limited enthusiasm even with Bitcoin's price rising, although data signalled that large entities are possibly building their stocks, unconcerned by the fluctuating price. Until the court hearing slated for Oct. 12, it's plausible for Bitcoin prices to exceed $28,000.
In a recent legal dispute between cryptocurrency exchange Binance and the U.S. Securities and Exchange Commission (SEC), an unexpected outcome occurred on Sep 18. Federal Magistrate Judge Zia M. Faruqui denied the SEC's request to access Binance.US's systems, recommending instead that the agency develop precise discovery demands. While this only momentarily delayed Binance's need to show the separation between Binance.US's custody services and Binance International, the market reacted favourably. Bitcoin value shot up to a three-week high, exceeding the $27,000 resistance mark. Market onlookers are now questioning if the surge is driven by leverage or authentic spot buying.
The following legal rulings will occur in three weeks' time. Judge Faruqui has planned a subsequent hearing on Oct. 12 and asked all parties to present a status report prior to the event. The judge's decision could be perceived as a temporary hindrance for the SEC, which could potentially pose future risks for Binance.
Binance's Founder and CEO, Changpeng “CZ” Zhao insists that Binance.US has not used Binance International's custody solutions, despite documents from Binance.US suggesting otherwise on Sep. 15. Yet, evidence from the SEC indicating that Binance intentionally misled the court is still lacking.
Regardless of the case's status quo, the scenario for Bitcoin bulls looks optimistic over the coming three weeks. Consequential changes are not anticipated until the impending court hearing. To understand the growing confidence amongst industry traders, we can look at the margin and derivatives metrics of Bitcoin.
Bitcoin margin and options metrics suggest a potential climb to $28,000. Margin markets offer crucial insights to professional investors by permitting an increase in exposure via stablecoin borrowing. Data shows that the margin borrowing ratio for OKX traders has dipped to its lowest in three months, a move further hinting at the diminishing dominance of leveraged long positions. However, the bulls still have an edge with the current ratio.
The reviewing of call and put options can also give us a sense of market sentiment. The put-to-call ratio change from put options favored at 1.50 to a balanced level indicates a diminishing interest in protective put options and a probable bullish momentum.
The combined analysis of Bitcoin margin and options markets reveal a balanced long and short position demand. On one hand, there's a clear indication that high leverage has not been used as Bitcoin's price rose recently. On the other hand, even with Bitcoin hitting a three-week high, there was a noticeable lack of buyer enthusiasm in the margin and options markets which may encourage the bears.
Nevertheless, the data implies that large entities, or 'whales', may be accumulating irrespective of the price. Crypto optimists have until Oct. 12, the date of the next hearing, where potential orders threatening Binance.US could be issued by the Federal Judge. Meanwhile, there's a chance we could see Bitcoin prices breaking over the $28,000 barrier.
This feed is for informational purposes and shouldn't be considered as legal or investment advice. The author's views expressed here may not reflect the views and opinions of Cointelegraph.
Published At
9/20/2023 1:10:00 PM
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