This is our largest Sphagnum and one you’re not likely to confuse with much else…apart from a prickly-looking form of S. palustre which has squarrose upper branch leaves.
There are two easy ways to resolve this conundrum with your hand-lens. The first is to search the capitulum for the central large bud of S. squarrosum. It can be a bit low and may not stick up much above the capitulum branches, but it will be there. S. palustre lacks such a bud. You can also break the stem and examine it in section. S. squarrosum has a wide central cylinder that is brown (or pale in shade forms) sheathed by a thin pale cortex of hyaline cells. S. palustre always has a much wider hyaline cortex that is 1/3 to ½ the width of its stem.
Under the microscope, a further confirmatory character of S. squarrosum is the lack of spiral fibrils around the cortex of its pendent branch axes (S. palustre and its relatives in Section Sphagnum have this distinctive character).Read the Field Guide account