Bitcoin

Why Bitcoin Suddenly Soared to $ 10,200 and Immediately Settled $ 75 Million

The price of Bitcoin (BTC) rose to $ 10,272 on July 26 in an unexpected weekend pickup. $ 74 million was settled with long contracts Many traders are unprepared only at BitMEX.

According to Coinmarketcap, Bitcoin’s market cap is currently $ 182,184,515,846.

Bitcoin's hourly price chart

Why Bitcoin Suddenly Soared to $ 10,200 and Immediately Settled $ 75 Million
Why Bitcoin Suddenly Soared to $ 10,200 and Immediately Settled $ 75 Million

Bitcoin hourly price chart. Source: TradingView.com

There seem to be two main reasons for Bitcoin’s sharp price hike from $ 9,700 to over $ 10,200. Is the Processing of over-financed short contracts and the Traders who benefit from oversold alternative cryptocurrencies (Old coins).

Profit-taking patterns observed at bitcoin price peaks

When the price of Bitcoin started to rise, the most important old coins, as well as good performance DeFi token, began to fall. Ethereum fell from $ 322 to $ 311 and the DeFi tokens, including Aave and YFI, were declined.

Market development in cryptocurrency July 26th

Market development in cryptocurrency on July 26. Source: Coin360

Simultaneous rejection of important altcoins and rising bitcoin prices suggest this Traders benefited from the latest altcoin rallies. At dealers They transferred the profits made with the altcoins to Bitcoin, may have triggered an upward trend in bitcoin prices as altcoins declined.

ETH, for example, It rose from $ 247 on July 23 to a daily high of $ 322 and was up 30%. Despite the strong sentiment around altcoins, investors may be more cautious to hedge their earnings.

Bulk processing of short contracts

When Bitcoin exceeded $ 10,000, overfunded short contracts were liquidated. When the price of Bitcoin reached $ 10,200, this triggered a liquidation cascade of $ 74 million in total..

Bitcoin has gone through many phases in which more than $ 50 million in short or long contracts have been processed. However, it is less typical that this happens in a few hours.

Massive liquidations of long contracts at $ 10,000 also suggest this $ 10,000 to $ 10,200 remain a zone of strong resistance. Once Bitcoin’s price reached $ 10,200, the price fell below $ 10,000, which meant a short-lived rally.

Investors are optimistic about the short-term price development of Bitcoin

Since the price of Bitcoin has recovered very well in the past few weeks, atSome executives and investors in the industry were optimistic about Bitcoin and ETH.

“You are ready?” Barry Silbert, CEO of Grayscale tweeted when the price of ether broke out of the dreaded $ 280 resistance level on July 25th.

The well-known merchant Peter Brandt, meanwhile, The Bitcoin price is expected to hit a new record, eventually hitting $ 50,000. Said as:

“I have my head there. A massive symmetrical triangle in points from $ BTC to Historic High, then $ 50,000.”

However, some variables could affect Bitcoin price developments in the short term. First, it is projected that lBitcoin financing rate in BitMEX is greater than 0.04%. That is almost four times higher than the average funding rate of 0.01%. This means that Most of the market takes long positions.

For Ethereum’s ETH token, the funding rate is over 0.1%, suggesting the rally is gradually overheating. In February, the price of the ETH declined to USD 280 because the funding rate exceeded 0.2%.and when the vast majority of the market took long positions.

Secondly, Since October 2019, $ 10,000 has been an important psychological level for Bitcoin. If Bitcoin’s price declines to $ 10,200, it would still be below the February 2020 high of $ 10,473.

Although it would be far-fetched to call it a lower high formation, it could show this The price of Bitcoin has not come out of the multi-month range properly.

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