Bitcoin News

Bitcoin’s Market Pump and Short Squeeze

16/11/2023

2 minute read

Bitcoin (BTC) is experiencing a significant boost in value on Wednesday, thanks to mass liquidations of leveraged traders’ positions. The BTC price has surged by over 6% to approximately $37,700, witnessing a 7% increase compared to Tuesday’s lows. This surge in the market has already resulted in nearly $100 million worth of leveraged short futures positions being wiped out, as reported by Coinglass.

Short Position Liquidations and Aggressive Dip-Buying

Bitcoin’s current short squeeze follows a recent dip to $35,000, which erased nearly $300 million worth of leveraged long BTC positions. While short position liquidations play a part in Bitcoin’s current pump, it’s worth mentioning that aggressive dip-buying following last week’s slip is also contributing to the market’s upward momentum.

Macroeconomic Factors Supporting Bitcoin’s Rebound

In addition to the aforementioned factors, recent US inflation and retail sales data strongly suggest that the US Federal Reserve’s tightening cycle is ending, potentially initiating a rate-cutting cycle. Consequently, US equity and government bond prices are on the rise, while the US Dollar is weakening. Bitcoin has historically performed well in such an environment, as it thrives when stock prices fall, bond yields decline, and the dollar weakens. Therefore, these macroeconomic tailwinds have played a significant role in the cryptocurrency’s substantial rebound from intra-week lows.

Furthermore, optimism surrounding the anticipated approval of spot Bitcoin ETFs in the US continues to drive investor interest and encourages them to seize short-term opportunities in the BTC market. Additionally, the elevated gold price indicates a persistent demand for safe-haven assets, particularly given the geopolitical tensions in the Middle East and Bitcoin’s increasing reputation as a safe-haven asset, as recognized by BlackRock’s Larry Fink.

“Bitcoin has increasingly been viewed as a safe-haven asset in 2023, with BlackRock’s Larry Fink praising it for ‘digitizing gold’ earlier this year.”

If Bitcoin successfully surpasses the yearly highs near $38,000, it could potentially open the door for the cryptocurrency to reach the psychologically significant $40,000 level. This level also coincides with the early May 2022 highs. Assuming the Bitcoin bulls maintain control, their next target would be the 2022 highs at $48,000.

The Potential of Crypto Presales

While Bitcoin’s outlook appears promising, individuals seeking higher probability of near-term gains might consider participating in crypto presales. This alternative investment strategy involves purchasing tokens of emerging crypto projects to support their development. These tokens are typically sold at lower prices, and there is a track record of presales netting significant exponential gains for early investors.

Cryptonews has dedicated considerable effort to identify the most promising crypto presales of 2023. Here is a list of 15 cryptocurrencies recommended by the project: