Bullish Start for Bitcoin and Crypto Market in October: Short Squeeze and Liquidations Drive Surprising Price Surge
Crypto News – The crypto market saw an impressive start to Oct., propelled by a surge in liquidations and a subsequent short squeeze.
Bitcoin experienced a notable rally, surpassing $28,000 for the first time since August 17 during a surprising Sunday evening move. Around 6:30 pm ET, BTC saw a rapid $800 increase, bouncing off its resistance level at around $27,200, as per CoinGecko data. At the last trading update, it had climbed 4.4% from the previous day to reach $28,271.
This bullish movement led to a significant liquidation of positions in the futures market, totaling $47.4 million, according to CoinGlass data. A substantial portion of this amount, approximately $42.9 million or 90%, came from short orders, providing a likely explanation for the sharp price increase.
The price spike coincided with the liquidation of short positions, suggesting that a short squeeze in the futures market may have been a driving factor. A short squeeze occurs when the price of an asset rises rapidly, compelling existing short order holders, who bet against the market with leverage, to buy the asset at higher prices as its value increases.
Following suit, Ethereum (ETH) mirrored Bitcoin’s performance by surpassing $1,700 for the first time in five weeks. The surge in ETH’s price led to the liquidation of futures orders worth $28 million.,
The collective market capitalization of crypto tokens surged by 3.3%, adding nearly $37 billion in the last 24 hours, reaching a total of $1.16 trillion. This positive spike in crypto prices resulted in a total liquidation of $114.9 million across the crypto market, with shorts constituting $97.8 million or over 85% of the total, according to CoinGlass data.
Solana (SOL) futures recorded the third highest liquidation after major cryptocurrencies, with liquidations worth $5.92 million. SOL also emerged as the leader in gains among the top 100 crypto tokens by market capitalization, experiencing a 13.5% increase overnight.
In addition to futures liquidations, positive sentiments in global markets may have been influenced by the successful effort of the U.S. government to avert a shutdown by extending its funding for 45 days. On October 2, U.S. stock market futures opened on a positive note, with the S&P 500 gaining 17.5 points to trade at 4,312.4 points. The tech-heavy Nasdaq index also opened with a 0.7% positive gap above Friday’s closing, reaching the 15,000 level.
Further enhancing the positive sentiment, VanEck is gearing up to launch the first futures Ethereum ETF today.
Historically, October has seen a surge in Bitcoin’s price over the past decade, except for the bear markets of 2014 and 2018, according to CoinGlass data.
1 Comment