Bitcoin’s recent price surge has caught many off guard, leading to a massive shakeup in the crypto market.
Bitcoin Breaks Records
Bitcoin smashed through the $110,000 mark, setting a new all-time high of around $111,800. This comes after a period of sideways trading, defying earlier predictions of a continued downturn. While it briefly touched $103,000 earlier this month, it needed a final push to break through the previous record. This recent rally has outperformed most other major cryptocurrencies; Ethereum, for example, only saw a 3.5% increase compared to Bitcoin’s 8.5%.
Half a Billion Dollars in Liquidations
The volatility caused by Bitcoin’s price jump resulted in over $516 million in crypto liquidations in just 24 hours. This means that many traders who bet against Bitcoin (short positions) had their trades automatically closed due to exceeding pre-set loss limits. A significant portion of these liquidations, about 64% or $334 million, came from short positions. Bitcoin and Ethereum were the biggest contributors to these liquidations. This event is often called a “short squeeze,” as it heavily impacted those betting against the market.
Despite the Squeeze, Speculation Continues
Despite the massive liquidations, the overall interest in Bitcoin derivatives hasn’t decreased. The “open interest,” which tracks the total number of open Bitcoin positions, has risen from $65 billion on May 18th to $81 billion currently. This suggests that despite the recent losses, speculation around Bitcoin remains high.
