Bitcoin is one of the oldest and most dominant cryptocurrencies in today’s world. It is currently the No. 1 cryptocurrency on CoinMarketcap because of its reliability and usage around the world.
For the first time since May 2022, the price of Bitcoin has surged up to $37K, which indicates an early bull run and continues the substantial upswing of the most prominent digital asset in its recent impressive surge.
Moreover, it could be because short traders might be exiting positions in a hurry, which is known as “short squeeze”, pushing the price to go higher.
Bitcoin Short Squeezes
A short squeeze happens when the price of the asset starts to rise instead of fall. As the price goes up, short sellers incur losses because they have to buy back the asset at a higher price than they sold it. This forces short sellers to exit their short positions by buying the asset, contributing to the upward pressure on its price.
It is reported that Asian exchanges such as BitMex, Binance, and OKZ are the reason behind $21 million in shorts getting wiped out and resulting in price increases.
Liquidation occurs when a trading platform forcibly terminates a trader’s leveraged position because of either a partial or complete depletion of the trader’s initial margin.
This occurs when a trader is incapable of fulfilling the margin requirements necessary to sustain a leveraged position, indicating a lack of adequate funds to maintain the trade.
Bitcoin ETF
A Bitcoin Exchange-Traded Fund (ETF) is a type of investment fund that tracks the price of Bitcoin, the popular cryptocurrency. ETFs are traded on stock exchanges, and they aim to provide investors with exposure to the performance of Bitcoin without requiring them to directly own and store the digital currency.
Bitcoin also gained bullish momentum when the U.S. SEC (Securities and Exchanges) started considering approving Bitcoin ETFs next year. An analyst at Bloomberg Intelligence, James Seyffart, mentions that there are 90% chances of Bitcoin ETF approvals in January 2024, which will open the doors for BlackRock and Peers.
At the time of writing, Bitcoin is currently trading at $37.2K, up by 7.92% in a week, and most traders do expect a bullish run.
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