Over $62 million in bitcoin shorts were liquidated in the past 24 hours, contributing to higher prices.
Bitcoin (BTC) surpassed the $37,000 threshold on Thursday, marking the first occurrence since May 2022 and further extending the substantial recent surge of the leading digital asset.
Those betting against the rise in prices, the short sellers, seem to be hastily abandoning their positions in what is known as a short squeeze, contributing to the upward momentum. Data indicates that nearly $50 million worth of liquidations took place within a four-hour span during the early Asian trading hours, triggering a short squeeze that propelled prices upward. Bitcoin (BTC) had already surpassed the $36,000 mark a few hours prior, marking the first occurrence in 18 months.
#BTC
— CoinGlass (@coinglass_com) November 9, 2023
Short squeezed again.
👉https://t.co/HknRjCxOgc pic.twitter.com/Mq1MfCACFC
Bitcoin has surged recently amid optimism U.S. regulators will approve ETFs that hold BTC, something some experts believe will lure a flood of investment money into the original cryptocurrency. Those hopes increased Wednesday following a CoinDesk report that the Securities and Exchange Commission has opened talks with Grayscale Investments on the details of the company’s application to convert its bitcoin trust, known as GBTC, into a bitcoin ETF.
Bitcoin short squeeze
A short squeeze is an atypical situation that sparks a swift surge in the price of any asset. It usually initiates when the price experiences an unexpected spike, prompting short sellers to swiftly close their positions. This, in turn, sets off a buying frenzy, creating a positive feedback loop.
Over $21 million of those shorts were wiped on futures exchange BitMEX, followed by OKX and Binance. This suggests the move could have been driven by market trades based in Asia, where these exchanges enjoy a relatively large user base.
Liquidation occurs when an exchange forcibly terminates a trader’s leveraged position because of a partial or complete loss of the trader’s initial margin. This occurs when a trader is unable to meet the margin requirements for a leveraged position, meaning they lack sufficient funds to maintain the trade.
Bitcoin ETFs
Elsewhere, analysts at Bloomberg Intelligence doubled down on expectations of a spot bitcoin ETF approval in the U.S., reiterating a “90% chance” of a launch by January.
New Research note from me today. We still believe 90% chance by Jan 10 for spot #Bitcoin ETF approvals. But if it comes earlier we are entering a window where a wave of approval orders for all the current applicants *COULD* occur pic.twitter.com/u6dBva1ytD
— James Seyffart (@JSeyff) November 8, 2023
Analyst James Seyffart reported in a recent post that the SEC issued delay orders simultaneously for BlackRock, Bitwise, VanEck, WisdomTree, Invesco, Fidelity, and Valkyrie. He mentioned, “If the regulatory agency intends to greenlight the launch for all 12 applicants, as we anticipate, this marks the initial opportunity since Grayscale’s legal triumph was confirmed.”
