Bitcoin price has experienced a dip following a legal decision against Coinbase’s staking program by the Securities and Exchange Commission. The Judge overseeing the case rejected Coinbase’s motion to dismiss charges related to its staking service, citing that the SEC has sufficiently pleaded that Coinbase engages in the unregistered offer and sale of securities. This development has led to increased volatility in the market, with Bitcoin’s price initially spiking to a high near $71,800 before plunging to $68,385 after the ruling was announced. Despite this, Bitcoin has since rebounded, highlighting a trend of limited downside moves with larger and quicker uptrends.

Analysts from The Kobeissi Letter have warned of a possible short squeeze, noting that the gap between institutional longs and hedge fund shorts is at a record high. With hedge funds holding nearly 15,000 in net short contracts and institutions holding nearly 20,000 in net longs, the price action of Bitcoin has been described as sporadic, driven by widespread short covering. The analysts question how long the shorts can hold on in the face of persistent longs.