Bitcoin Pauses After Breaching $87,000... Short Squeeze and SEC Deregulation Fuel Rally

Bitcoin pulled back slightly after hitting an eight-month high, entering a consolidation phase. The rally was fueled by the U.S. Securities and Exchange Commission's (SEC) digital asset deregulation measures, a massive wave of short position liquidations, and growing anticipation of a bullish October.

According to CoinMarketCap on the 22nd, Bitcoin was trading at $85,651 per coin as of 10:20 a.m., up 4.81% from the previous day. Earlier at 5:30 a.m., it had spiked to $87,281 — the highest level in eight months since January. Weekly gains exceeded 10%.

The immediate catalyst for this rebound was the SEC's deregulation move. On the 17th (local time), the SEC announced a five-year exemption from certain regulations that apply to traditional securities exchanges for tokenized stock trading platforms meeting specific requirements. This opens the door for tokenizing and trading U.S. stocks on blockchain networks, and is seen as potentially accelerating the integration of traditional financial assets with digital asset markets.

Bitcoin had faced downward pressure after the Clarity Act — which would establish a digital asset regulatory framework — failed to advance in the U.S. Senate. However, the SEC quickly followed with deregulation measures, rapidly restoring investor sentiment. Park Sung-je, an analyst at Shinhan Securities, explained: "Just as the market anticipated negative fallout from the Clarity Act's delay, the SEC signaled its intention to bring digital assets and token markets into the regulatory fold, which improved investor sentiment."