Bitcoin's price soared to $38,437 on the Bitstamp exchange earlier today. This marks its highest level since May 2022.
The top reasons behind the rally
The resolution of the Binance legal saga is seen as a pivotal factor in this recent price hike. Binance, the world's largest cryptocurrency exchange, recently faced legal challenges, including a guilty plea from its founder Changpeng Zhao for violating U.S. anti-money-laundering laws and his departure.
The exchange agreed to pay a hefty $4.3 billion in fines. Galaxy Digital CEO Mike Novogratz had earlier predicted that a settlement in this case would be "super bullish" for Bitcoin.
His prediction seems to be materializing since the market has responded positively to the resolution.
Additionally, the anticipation surrounding the approval of "spot bitcoin" ETFs by the U.S. Securities and Exchange Commission (SEC) is contributing to the bullish sentiment.
The SEC faces a Jan. 10 deadline to decide on several pending applications for these ETFs.
If approved, they are expected to offer a more cost-effective way for investors to gain exposure to Bitcoin.
Impact of liquidations
Another critical factor influencing Bitcoin's price is the recent spike in market liquidations. According to Coinglass data, there has been a substantial increase in both long and short position liquidations across various time frames, with total liquidations in the past 24 hours reaching $80.29 million.
This includes $26.79 million in long positions and $53.49 million in short positions.
Such liquidations often contribute to increased market volatility, influencing the price dynamics of Bitcoin.