Bitcoin’s $28K rally causes biggest short squeeze this month.

Bitcoin (BTC) increased to over $28,000 on Tuesday afternoon due to the largest short squeeze of the month.

According to blockchain Indices data, the largest cryptocurrency by market capitalization has been trading flat around $26,800 for most of the day. However, within a few hours, it surged to as high as $28,150. It recently dropped to around $27,900, but it remains up 5.2% over the past 24 hours and has outperformed most other digital assets.

As per CoinGlass data, traders who were positioned for prices to drop lost around $36.6 million in liquidations over the past 24 hours. This marks the largest amount of short liquidations since May 28.

The price increase follows a number of large financial services institutions announcing major crypto initiatives, which has brightened the mood after increasing U.S. regulatory pressure, including lawsuits against crypto exchanges Binance and Coinbase that had soured the mood in recent weeks.

Read more: BlackRock’s Bitcoin ETF Would Be a Big Deal

Banking giant Deutsche Bank announced on Tuesday that it had applied for a digital asset custody license in Germany. Crypto exchange EDX Markets, which received funding from financial heavyweights including Charles Schwab (SCHW), Citadel Securities, and Fidelity Digital Assets, started offering trading with BTC and ether (ETH) on the same day. Last week, investment management giant BlackRock (BLK) surprised markets by filing for a spot BTC exchange-traded fund (ETF).

“The bitcoin rally certainly is correlated with the news of all these larger traditional financial institutions looking to get serious exposure to the digital asset ecosystem,” said Brent Xu, CEO and co-founder of decentralized finance (DeFi) bond market platform Umee. “It’s clear that BlackRock, Fidelity and the others have client bases that want to invest in BTC and other crypto assets by way of ETFs and other more traditional investment vehicles.

“This news has served to somewhat blunt the relatively bleak regulatory environment that the United States finds itself in, and it also seems to suggest that these big players are wanting a regulatory environment that is both clearer and more fair than what exists right now,” Xu added.

Edited by James Rubin.

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