Shorts get burned as Bitcoin jumps to $39,000
07:17, 26 July 2021
The price of bitcoin (BTC) jumped by more than $5,000 or 13% in the last 24 hours, its best daily evolution in over a month. The positive momentum has spread across the market, with all the leading crypto assets recording strong upward movements.
European investors woke up to see bitcoin at $39,000, up from $34,000 on Sunday. It’s the first time since 16 June when the top cryptocurrency reached this level, closing in on the $40,000 mark.
The overnight surge in crypto prices has led to the liquidation of short positions worth $940m across the market, the highest level in over two months, according to Bybt.com data.
The closing of many short positions at once may have caused a short squeeze, which could explain the rapid price increase. A short squeeze occurs when investors holding short positions are forced to close them fast while the asset price increases, generating additional demand and pushing prices even higher.
Amazon tipped to prepare bitcoin adoption
The bitcoin rally was also linked to a news article published by CityAM.com, which says Amazon may start taking Bitcoin payments by the end of this year. The article, which quotes an Amazon insider, also says the US online retailer may also launch its own crypto token next year.
Speculation around Amazon’s growing interest in cryptocurrencies intensified after the company announced it was hiring a digital currency and blockchain expert.
If Amazon were indeed to adopt Bitcoin and other cryptocurrencies as payment means, this would represent a huge boost for the crypto markets and a big step toward mass adoption. Amazon is the world’s biggest online retailer in terms of revenues, with sales of $386bn in 2020.
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Bitcoin up 30% in five days
Bitcoin has increased by more than 30% since Wednesday, after spending almost 24 hours below $30,000, its lowest level since early January. Despite this increase to around $39,000, it is still far less than the BTC all-time high from three months ago of $64,863.10 on 13 April according to CoinMarketCap.
The fact that the $29,000 support level has held has been interpreted as a positive sign by investors. A break under $29,000 would have opened the way for further declines.
A series of technical analysis indicators now point to bullish momentum. The most important one is the bitcoin price moving above its 50-day moving average for the first time since mid-May.
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