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Until a few hours ago, Bitcoin’s price was expected to continue stagnating on the charts. With most of the cryptocurrency’s technical indicators wearing a bearish hue, many in the community expected the world’s largest cryptocurrency to trade within the $31,000-$33,000 range in the near-term.
Source: TradingView
However, a major opening for the price came in the form of SpaceX CEO Elon Musk after he ‘merely’ updated his Twitter bio with the word – Bitcoin. While a minor update, it had an exponentially bullish effect on the price performance of the cryptocurrency, with market traders pushing the crypto’s value by a whopping 16 percent in an hour’s time.
At press time, Bitcoin was continuing to hold a position very close to the $37,000-price range.
Source: Glassnode
However, while price spikes are usually a celebratory affair in any market, short-sellers had to bear the brunt of this unexpected endorsement from Musk and the resulting price surge. Glassnode’s data highlighted that in a brief span of 10 minutes, close to $57M in short positions on Binance were liquidated. In the hours that followed, Binance saw over $201 million short positions undergo liquidation.
Source: ByBt
According to market data provided by Bybt, in the hours that followed, a whopping $558 million were liquidated from traders who had opened short positions for the coin. Today’s Bitcoin pump saw the coin’s price trajectory make a stunning U-turn after having endured quite a bit of price stagnation and sideways movement during the course of the past few days.
This move by Bitcoin has also translated to increased volatility for the king coin. According to BitPremier’s data, Bitcoin volatility also hit a 6-month high. The 30-day BTC/USD volatility stood at 5.66 percent, at press time, having risen from around 3.29 percent at the start of the year.
COT analysis on #Bitcoin done for @elonmusk and #wallstreetbets
CME having around 50,000 OI (or $2bln value) on $BTC futures contract. 60% of all OI is held by leveraged funds.
These funds hold 76% of all SHORT positions!!!
To whom will these funds cry in few weeks when they? pic.twitter.com/e1lexPvG7G— How Options (@HowOptions) January 29, 2021
To add to Bitcoin’s bullish scene, it was also noted that on the CME, Bitcoin Futures contracts registered an Open Interest amounting to around $2 billion in valuation, with 60% of all OI being held by leveraged funds. Out of these funds, it was observed that a massive 76% of them were short positions.
This goes to show how unexpected this price surge was, even for an asset like Bitcoin. With technical indicators like the Bollinger Bands continuing to expand and highlight the massive spike in volatility, the next 12-hours will determine whether Bitcoin will stabilize around its press time valuation or see a price correction.
