Bitcoin surged above $ 53,000 on Monday. At 13:15 GMT, the coin changed hands at $ 53,324, up 7.07% over the past 24 hours.
However, around $ 150 million worth of shorts were liquidated within hours when the bulls returned to keep the market firmly under control. The cryptocurrency surged from $ 47,000 to over $ 53,000 when the short squeeze occurred after a bear market decline late last week.
Other cryptocurrencies like ETH and BNB also saw brief pressures as they rose around 15%. With Bitcoin rebounding 12% in one day, the futures market appears to have completely reset.
Bitcoin Short Squeeze is bullish
A short squeeze refers to when short sales on the futures market are liquidated in a short period of time. If the shorts are liquidated, short sellers will have to buy back their positions. This automatically leads to increasing demand from buyers in the market.
Therefore, the number of short positions is rapidly decreasing and long contracts or buy orders dominate the market.
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In the case of Bitcoin, the funding rate has remained relatively low over the past 24 hours despite BTC’s strong rally. According to Bybt.com, the funding rate on major exchanges for Bitcoin is below 0.01%, which is below the neutral rate.
There are more long positions in the futures market at the current price, which could drive the price higher.
Lex Moskovski, CIO at Moskovski Capital said:
“~ $ 150 million in #bitcoin shorts were liquidated on this brief climb. Nothing smells better than roasted bears in the morning. “
The mood of the traders shows optimistic expectations
In the short term, many traders are optimistic that the $ 55,000 price level is an important one to reclaim the chance that Bitcoin will hit its previous ATH.
Johnny, a cryptocurrency derivatives trader, said:
“We passed the lows and now we have a very strong jump. We’re not out of the woods yet. Claim back $ 55,500 and then we can talk about new ATH. Play it level by level for now. Strong response so far. “
Another trader, Adnan Van Dal, noted that the likelihood of a price spike is very high if the price of BTC doesn’t fall until after the US market opens. He wrote on Twitter:
“If $ BTC can make it to the US Open (EUR am Man shrugs), I think cud is fine for a little. Orders of durable goods on open, actual dates were good, SPX near ATH post useful Friday profit taking & started solid. Thinking helps – random SPX / $ BTC weakness is a thing this year. TSLA placeholder later. “
As it stands, the cops seem to be back. The bears’ impact on the market was short-lived. Currently, the price is aiming for a rebound above $ 55,000, and the likelihood that the benchmark cryptocurrency will soon hit a new all-time high cannot be ignored.
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Featured image from Pixabay, Charts from Tradingview.com