Jan 3, 2020 18:30 UTC
Jan 3, 2020 at 18:30 UTC
Bitcoin Surged 6% in Just 1 Hour
Early yesterday, Bitcoin plunged below $7,000 as bears took control from the bulls. However, bulls were not completely asleep. They made a significant comeback, pushing Bitcoin back above $7,000 once again. Bitcoin gained more than $400 in just one hour.
So, what happened exactly? And, what traders are thinking about this Bitcoin move?
A Short Squeeze of Bitcoin
The most common theory currently doing rounds over the internet is that this was a classic short squeeze.
As indicated by cryptocurrency research and data firm, Skew Markets, a minimum of $16 million worth of short positions on BitMEX were liquidated in this massive surge. Where there was not a large amount of liquidations on a macro scale, the crypto market is seemingly still not liquid owing to the holidays, something some moves like the one we have seen now.
Needless to say, prior to Bitcoin’s this move, the predicted BitMEX funding rate was about -0.0050%, that’s actually a level that some people say is a sign of bounce for moving the funding rate back towards 0% is highly possible.
The Iranian Story
This is another theory that says global news has been affecting the BTC price. Before some time, it was disclosed that US President Donald Trump ordered the attacks on Iran’s army leaders. While in these attacks, Iran lost a few of its most important men militarily speaking, which resulted in global markets going relatively haywire.
For example, Crude Oil gained up to 3%, and gold easily saw an immediate $10 gain in the minute after the reports were released about this Iran-related event. Some people even suggested that Bitcoin, such as the other assets, moved owing to this geopolitical event.
A cryptocurrency and macro analyst, Alex Kruger is not so sure about this thesis. In the wake of the jump, he posted this tweet notifying that it’s likely a false story owing to the fact that Bitcoin moved hours after other assets did.
Talking heads will soon be discussing how bitcoin is a safe haven and is going up because of Iran. Which is absolute nonsense. Round numbers are there to get run over, in both directions. I have a small long so I'll be happy if speculators use the narrative to push prices up.
— Alex Krüger (@krugermacro) January 3, 2020