Bitcoin’s price had a wild ride. After hitting a record high of $108,786 in January, it crashed down to around $74,000. But recently, things have been looking up. Is this the start of a new bull market?
Binance Sees Massive Short Squeeze
A crypto analyst, Darkfost, noticed something interesting. Lots of traders bet against Bitcoin (short positions) on Binance when the price was falling from its all-time high. These bets meant they’d profit if the price went down, adding to the downward pressure.
But as Bitcoin’s price started recovering, these short positions became a problem for those traders. They were slowly being liquidated (closed out), and this actually helped Bitcoin’s price go up because it forced buying.
On May 8th, things got dramatic. Over $31 million worth of short positions were liquidated on Binance in a single day – the highest since March!
Low Funding Rates and What They Mean
Darkfost also pointed out that funding rates (basically, the cost of holding a short position) were very low, around 0.004. This suggests that there are still a lot of short positions out there, and traders aren’t eager to bet on
Bitcoin’s rise.
However, if more of these short positions get liquidated, it could significantly boost Bitcoin’s price and potentially push it past its previous all-time high.
Bitcoin’s Current Status
At the time of writing, Bitcoin is trading around $104,335, up over 1% in the last day and almost 9% in the last week. The situation is definitely worth watching!
