The ongoing legal clash between Binance and the U.S. SEC saw a surprising twist as Magistrate Judge Zia M. Faruqui rejected the SEC’s request for access to Binance.US’s systems. This development temporarily buoyed Bitcoin, which broke past the $27,000 resistance level. But is this surge driven by leverage or genuine demand?

Metrics Shed Light on Bitcoin’s Trajectory

To understand the rally’s nature, metrics related to Bitcoin derivatives are crucial. Investors will have to wait three weeks for further rulings, as a follow-up hearing is scheduled for Oct. 12.

Margin Markets: These offer insights into professional traders’ positioning through stablecoin borrowing. Recent data reveals a drop in the margin-lending ratio for OKX traders, signaling reduced dominance of leverage long positions, though bulls still hold the upper hand.

OKX stablecoin/BTC margin-lending ratio. Source: OKX

Options Market: The put-to-call ratio for Bitcoin options volume shifted from favoring put options to a balanced level on Sep. 20. This indicates reduced interest in protective puts. While Bitcoin’s price hit a three-week high, there was limited enthusiasm in the margin and options markets.

A Glimpse of Spot Buying Support

The data suggests a balance between long and short positions in both Bitcoin margin and options markets, hinting at a lack of excessive leverage as the price climbed. However, there are signs of buying support from spot orders, potentially indicating whale accumulation.

BTC options volume put-to-call ratio. Source: Laevitas.ch

Bitcoin’s recent surge to $27,000 amid the Binance-SEC legal battle has brought optimism to the market. Margin and options metrics suggest a balanced demand between long and short positions, with signs of spot buying support. As the legal battle unfolds, Bitcoin’s price trajectory remains uncertain, but a move towards $28,000 is now in the realm of possibility.