Analysts speculate a “short squeeze” to have fueled the Bitcoin bull run

Bitcoin has expressed extreme volatility in the market in the past week. Following Mr. Mark Zuckerberg’s appearance in the U.S House of Representatives where the congressman highlighted the cryptocurrencies as a threat to the traditional financial system and sovereign currency, BTC had fallen more than $1000 within a matter of an hour and had broken long-held strong support at $7,800. Following the sharp decline, analysts were expecting the bears to take charge and awaiting further downward rallies. Later in the day on Friday, October 25^th, 2019, however, BTC managed to beat the odds once again and initiated an uninterrupted upward rally that brought the price back above $8,000 within a few hours.

Bitcoin Hikes To Above $10,000

The bull run has continued on Saturday morning with BTC having made a high of $10,400 so far. This marks the globally well-known cryptocurrency breaking above two crucial resistances located at around $8,700 and $9,300 respectively. BTC is currently trading at around $9,500.

The Bitcoin analysts had previously highlighted Mr. Xi Jinping’s (China’s President) statement that it would be a commendable idea for China, in the long run, to adopt blockchain and seize the opportunity. China had previously blocked the operations for all major cryptocurrencies including Bitcoin. The recent announcement by the President had, however, stirred up the chances of the largest Asian market to be opened for Bitcoin in the near future.

Explanation For The Recent Hike In BTC

The financial experts have, however, now offered an alternative explanation for the massive increase in Bitcoin’s price in 12-hours. According to the data extracted from Skew (cryptocurrency analytics provider), it has been highlighted that Mr. Jinping’s statement may have only fueled a hike of around $200 in Bitcoin. The short increment, however, liquidated the short positions valued at around $150 million on the BitMEX crypto exchange.

This, in turn, activated a “short squeeze” in the crypto market. In simpler words, the sellers tried to cover for the losses of their short positions that consequently increased the buying volume massively and contributed to a raging upward rally in BTC. According to Mr. Mati Greenspan, senior market analyst at eToro, Bitcoin had lately been struggling with volume that historically opens the door for a rapid sentiment change following news that has the potential to affect the market prices.

The analysts have further added that despite an uninterrupted bull run, it is too soon to comment on the sustainability of the upbeat trend in Bitcoin. It is recommended for the price to settle down before an informed strategy can be devised for trading.