Bitcoin’s rally in the past 10 hours is nothing short of a miracle, as it has pumped by 11% in over 10 hours causing the price to surge from $6,200 to $7,000. The market cap of Bitcoin has reached $126 billion after the prices hit a new high of $7,294. The 24-hour price change has caused Bitcoin to reach 9.53%.
At press time, Bitcoin showed a small correction after hitting a high of $7,294. However, the price is currently at $7,151 according to CoinMarketCap. The sudden surge has definitely caught everyone by a surprise, so what’s behind this rally?
There has been talk about an ongoing short squeeze, as the short-side open interest on platforms like Bitfinex and BitMEX have begun to reach new heights. Due to how these platforms work, when there is a majority of shorts (like there is now), this side of the market is required to fund longs. Yesterday, the daily rate was -0.09% on BitMEX. This incentivizes traders on the short side to close their positions with time, which thus causes buying pressure. With the daily funding rate not showing signs of stopping soon, shorts have begun to close their positions, and may even cause a “squeeze” in the near future, whereas many positions are closed due to cascading stop losses.
So the question becomes, will this bull run last?