Bitcoin Nears $66K After Monster ETF Day

The latest price moves in crypto markets in context for Sept. 27, 2024.

Bitcoin rose to its highest since early August on Friday, closing in on a return to $66,000 as a huge stimulus package from China boosted memecoins and sparked a short squeeze on some tokens.

The world's largest cryptocurrency rose to over $65,900 during mid-morning in Europe, up over 3% in the past 24 hours. BTC then retreated to trade just above $65,500.

Bitcoin ETFs in the U.S. enjoyed a monster day on Thursday, with a record $365 million flowing into the funds, taking the weekly total to over $600 million.

The broader digital asset market, as measured by the CoinDesk 20 Index, also rose by around 1.8%, with dogecoin leading the gains.

DOGE rose about 9% to nearly $0.125 amid a surge in memecoin prices.

China's plans for a stimulus package lit a fire under memecoins, with both SHIB and FLOKI registering double-digit gains. Memecoin prices tend to respond positively to liquidity injections because the increased availability of cash nurtures a greater appetite for risk among traders.

Memecoins are community-driven and jump when the market displays risk-on behavior.

"Leading the gains are the SOL and BTC ecosystems, indicating a strong focus on meme coins as overall liquidity grows. While not nearly as explosive as meme coins on the aforementioned chains, meme coins on Ethereum, such as $PEPE and $SHIB, are also experiencing heightened interest from the market," HashKey OTC CEO Li Liang said.

TIA, the token of data-availability network Celestia, posted its best monthly gain this year, confounding traders who'd positioned for a drop in the price as the result of a $1.13 billion token unlock due next month.

September's market-beating 40% surge takes place against a background of some market participants seeking downside hedges due to concerns the token unlock due Oct. 31, equivalent to 16% of its total supply, will flood the market and depress prices.

However, the bias for shorts, likely stemming from the hedging activity, might have led to a short squeeze, contributing to the TIA rally.

"Traders tried to sell ahead of the [unlock] event from Julyish. I'd argue the squeeze has already happened," Jake Ostovskis, an over-the-counter trader at Wintermute, told CoinDesk.