After a dry run of over 6 weeks, Bitcoin topped $39,000 for the first time on Sunday indicating a strong upward trend. Experts believe the 15% strong Bitcoin rally can be attributed to a recent sell-off plus speculations around Amazon’s involvement with cryptocurrencies.
The global crypto market cap touched $1.52 trillion, a 9.27% increase in a single day, as reported by The Economic Times. Besides Bitcoin, other major cryptocurrencies too crossed crucial technical levels for the first time since mid-June. You can now convert INR to Bitcoin at the best rate.
Ethereum, the closest competitor to Bitcoin, gained by approx. 6%. While Dogecoin, the meme-based crypto backed by Elon Musk, showed the largest move of nearly 16% over the same period.
Reasons For Strong Bullish Sentiment
Adding $114 billion to the crypto market, the recent spike in value can be attributed to a number of factors.
The positive conclusion of the B-word conference held last week was the initial trigger. Favourable comments from Tesla’s Elon Musk, Twitter’s Jack Dorsey and Cathie Wood of Ark Invest cemented investor’s confidence in bitcoin’s future.
Perhaps, the major upward push for crypto prices came from speculations around Amazon accepting bitcoin payments by the year end.
There are other factors that could have supported bitcoin’s bullishness. For one, FTX, a popular crypto exchange, announced curbing of a type of high-risk trading that is partly blamed for the sharp fluctuations in Bitcoin’s value.
Short Squeeze Driving the Prices Up
Brandon Arvanaghi, a prominent Bitcoin mining engineer, noted that these bullish moves have contributed to a “short squeeze” in the market. According to Bybt.com, over $700 million of Bitcoin shorts were liquidated on Monday, the most in any day in the past 3 months.
Investors who had short bitcoin earlier expected the prices to drop further. But the change in sentiment and the anticipation of a stronger bull run forced investors to exit their short positions to cut losses. The short squeeze further drove the prices up.
“The extent of the jump was probably driven by over-leveraged shorts,” noted Vijay Ayyar, Luno’s head.
Amazon’s Involvement with Cryptocurrencies
According to the London Newspaper, City AM, the e-commerce giant, Amazon.com Inc, is lining up Bitcoin payments by the year end. Added to that, Amazon is planning to launch its own cryptocurrency by 2022.
However, Amazon denied any such bitcoin plans but acknowledged an interest in cryptocurrencies. Moreover, Amazon published a job advertisement last week for ‘Digital Currency and Blockchain Lead’ for its payments team. Buy Bitcoin at the best rate.
The retailing conglomerate, along with big-tech companies like Apple and Facebook, is on the lookout for opportunities to ride the emerging crypto wave around the world.
Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.
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