Bitcoin Soars Above $37,800 Amidst ETF Anticipation and Short Squeeze
The spot price of Bitcoin surged above $37,800, driven by anticipation of an SEC-approved spot Bitcoin ETF and a short squeeze that led to the liquidation of $78.44 million in Bitcoin shorts within 24 hours.
Notably, significant liquidations occurred in Asian markets, particularly on exchanges like BitMEX, OKX, and Binance, highlighting their influence on the price surge.
Short Squeeze Pumps Bitcoin Price
Data from Coinglass shows that short sellers liquidated around $78.44 million in Bitcoin shorts over a 24-hour period. Additionally, investors liquidated a total of $118.14 million in BTC positions during this time.
According to FXStreet, approximately $50 million of these liquidations happened within a 4-hour window during early Asian trading hours. The report also indicated that over $21 million of these shorts were wiped on futures exchange BitMEX, followed by OKX and Binance.
How Short Sellers Support BTC Gains
A short selling position is a way for traders to bet on the price of an asset decreasing by borrowing and selling it with the intention to buy it back later at a lower price. However, a short squeeze can unexpectedly pump prices of the shorted commodity.
As defined by Investing.com, a short squeeze leads to a rapid price rise in any asset when short sellers exit their positions due to an unexpected jump in price. This causes them to buy more of the asset to cover their positions, resulting in further price increase.
Hot Take: Bitcoin’s Ongoing Volatility and ETF Expectations
Bitcoin’s spot price surpassed $37,800 driven by the anticipation of an SEC-approved spot Bitcoin ETF and a short squeeze that resulted in significant liquidations in Asian markets. As Bitcoin enthusiasts await the SEC’s decision, this tumultuous sequence has affected traders globally.
TL;DR
- Bitcoin’s spot price soared above $37,800, influenced by anticipation of an SEC-approved spot Bitcoin ETF and a short squeeze, resulting in $78.44 million in Bitcoin shorts liquidated in 24 hours.
- Significant liquidations occurred in Asian markets, notably on exchanges like BitMEX, OKX, and Binance, indicating their impact on the price surge.
- The short squeeze, a rapid increase in Bitcoin’s price forced short sellers to cover their positions amplifying the price rise amidst Bitcoin’s ongoing volatility and ETF expectations.
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