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Bitcoin Blast-Off: What Caused $1,500 BTC Price Spike and Can it Continue?

Published August 30, 2023 12:33 PM
Nikola Lazic
Published August 30, 2023 12:33 PM

Key Takeaways

  • Grayscale achieves a partial victory against SEC.
  • Bitcoin spiked to $28,000 after court decision.
  • Chart analysis points out a potential downtrend continuation.

The U.S. Court of Appeals for the D.C. Circuit ruled a reassessment of the SEC’s refusal of Grayscale’s Bitcoin ETF application. This development marks a significant turning point in the cryptocurrency space. 

Historically, the SEC has rejected Bitcoin ETF proposals, citing concerns about market manipulation. However, the court emphasized that the SEC’s reasons for denial lacked clear comprehensiveness.

The court explained that the SEC failed to offer sufficient rationale for approving the listing of two Bitcoin futures ETPs while rejecting Grayscale’s proposed Bitcoin ETP.

Bitcoin’s price surged over 7% to $28,000 on Tuesday after a U.S. federal appeals court directed the SEC to re-evaluate its denial of Grayscale Investments’ proposal to turn its Grayscale Bitcoin Trust (GBTC) into an ETF.

While Bitcoin settled just above $27,900, GBTC’s value increased by 17%. This court decision hints at the potential for a Bitcoin ETF in the U.S., which could enhance accessibility to Bitcoin investments.

After the news, crypto stocks like Coinbase and MicroStrategy surged. Major altcoins also rose about 5%. The ruling visibly impacted the market, causing $87 million in shorts to be liquidated in a day, possibly leading to the price spike.

As Bitcoin previously fell by 14%, can this be a catalyst for an upturn? 

On-chain data

The positive news definitely impacted the cryptocurrency market and boosted Bitcoin price. But what did actually cause this spike? 

Looking at the Bitcoin all exchanges reserves chart, there is evidence of an on-chain accumulation. From August 15, when the price started decreasing, the number of Bitcoins on exchange hasn’t changed a lot. But in the sideways range that followed between August 18 and 28, it started picking up the momentum.

All exchange reserves make a new low
Bitcoin exchange reserves hit a new low recently

It went from 2,071,250 to 2,028,169 right before the rise and has now fallen to 2,007,135. This suggests that, before the news, investors had been accumulating Bitcoin in its sideways range and later doubled down after the news came. 

OI spiked
Bitcoin Open Interest increased

The derivatives market has certainly amplified the increase. Open interest, which represents the number of open positions (long and short), was also on the rise. This metric suggests that traders reacted to the news and were attentive in capturing the uptrend.

Shorts liquidated
Bitcoin shortsellers liquidated their position

There was a large spike in short liquidations that definitely added to the price rise, as short positions were forced to buy up the coin as their stop losses were reached. 

Bitcoin Price Analysis 

In our previous Bitcoin analysis, we projected the start of a recovery to exactly $28,000.

This was expected as a corrective move, either as a lower B wave from the ABC correction to target the $22,000 area for Bitcoin, or as wave 2 from the larger five-wave impulse downward.

BTC price prediction
Bitcoin set for another uptrend

In both cases, we may see a further downside movement for the Bitcoin, according to these counts, as the uptrend completion occurred. $28,000 is a significant horizontal level that served as support and is now being tested for resistance. We saw a large price spike but the overall bearish structure hasn’t been broken. 

Price increases in accordance to the previous projection
Bitcoin bearish structure unbroken

Reviewing the current chart, this projection remains valid, even if the price rises slightly. It would become invalid if it surpasses its previous high of $31,850. This would suggest the earlier assumed completed uptrend has further potential upward movement.


In the midst of the recent regulatory developments, markets reacted positively. It is important to note that this isn’t a major victory nor it indicates that the Grayscale Bitcoin Spot ETF is a certainty.

On the other hand, it just means that the U.S. regulators have taken a fair approach to crypto regulations and haven’t been one-sided on the ETF matter. Bitcoin’s price rose on both fundamentals and technicals sides but can this rise propel the market into a sustainable uptrend? 

We are going to see shortly the outcome as $28,000 may be an area of strong resistance that is going to set up the price into a further downtrend. 


Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.


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