Bitcoin burst to life during Asia trading hours today, kicking off the week with a surge to almost US$40,000 this morning, an increase of over 12% in 24-hour trading. Bitcoin is currently hovering around US$38,000 as of publishing time, according to CoinGecko data.
Market watchers told Forkast.News that the rally could be attributed to speculation over the weekend that e-commerce giant Amazon was planning to enter the crypto market as well as Elon Musk’s comments last week that Tesla will resume accepting Bitcoin as payment for purchases once the renewable energy used for Bitcoin mining exceeds 50%.
Tony Sycamore, City Index’s senior market analyst for APAC, told Forkast.News that multiple factors were at play — the failure to break to new lows after the “B-Word” conference last week, talk that Amazon was looking to get involved in the cryptocurrency space and may accept payments in Bitcoin, improved risk sentiment following the recovery in equities last week flowing through into cryptocurrencies, and signs of a base, were reasons driving the short covering rally pushing Bitcoin above the highs of late June.
Justin d’Anethan, head of exchange sales at Nasdaq-listed crypto company EQONEX, told Forkast.News that the news around Amazon could have been the trigger. “While a risk-on tilt in traditional markets probably helped, along with supportive comments from tech leaders during the ‘B-Word’ conference, the news that came over the weekend was Amazon looking to hire cryptocurrency experts,” d’Anethan said.
Amazon late last week posted a job vacancy for a “Digital Currency and Blockchain Product Lead” for its “Payments Acceptance & Experience” team.
“It’s important to remember that a lot of positive news came through, in the past weeks and months but prices remained, until now, unresponsive. Eventually, the news like more institutions getting involved, banks looking at the space, more crypto-linked products, etc add up,” d’Anethan said. “Maybe this weekend’s news was the trigger that investors needed for the narrative to change.”
Amid Bitcoin’s price surge, over US$1 billion in crypto short positions were liquidated over the past 12 hours, with US$413.92 million worth of liquidations taking place on Bybit, followed by Huobi and OKEx with US$213.93 million and US$204.68 million respectively, according to Bybt data.
Bybit, Huobi and OKEx are exchanges popular with Asian crypto derivatives traders. Binance — the biggest crypto derivatives exchange in the world by trading volume — saw US$105.87 million in liquidations, with the price of Bitcoin crossing US$48,000 at one point on Binance Futures.
“The most obvious reason for the pump seems to be Asian traders and investors waking up to the Amazon Bitcoin/crypto revelation,” Igneus Terrenus, crypto derivatives exchange Bybit’s head of communications, told Forkast.News in an email. “Bybit now routinely sees the highest volume of liquidations because we have one of the largest trading volumes and we report liquidations with total transparency.”
D’Anethan noted: “In the past 24 hours, about US$1.05 billion worth of short positions were liquidated, pushing prices from 34K to, briefly, 40K (or almost 17% higher in the span of a few hours).”
“While it might be tempting for investors to just ‘FOMO’ in, it’s important to not chase prices, especially when they jump up like this. A correction or consolidation is likely. We just broke out of a multi-week downtrend and will need a bottom to form above 32K-33K to confirm we’re indeed out,” d’Anethan said. “If this narrative endures, we could go up very fast, especially since the 50K’s are not unfamiliar anymore.”
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