Bitcoin Spike Fueled By Short Squeeze As Market Ignores Tether News

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Bitcoin market analysts are speculating on what fueled the cryptocurrency’s price rise on Monday, and some of the experts say a short squeeze from heavily indebted traders may have added to the upward pressure on prices.

Bitcoin and other cryptocurrencies have increased dramatically over the past 24 hours. Bitcoin, the world’s largest cryptocurrency, was trading at $ 39,189 at the time of publication, for a 15% price gain.

According to Laurent Kssis, global head of exchange-traded products, short sell-offs – bearish trades where the principal was wiped out due to margin calls – started around 9 p.m. ET on Sunday, helping to improve market sentiment and boost market sentiment. drive up the price of BTC. at 21Shares AG.

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“Many on Twitter have been calling for a short push for weeks, and the calls appear to have been answered,” Kssis said. “It’s all about the timing of the market. ”

Pedro Febrocas, blockchain analyst at Quantum Economics, attributes the price spike to short-term retailers becoming “rekt.” Rekt is Internet slang for “castaway” or “completely destroyed”.

Bitcoin analyst “Willy Woo” tweeted:

“We totally agree with his point of view,” Febrocas said of Woo’s tweet.

Related: The Tether Put: Crypto Equivalent of Credit Default Swap?

Bloomberg News reported Monday morning that the US Department of Justice is investigating Tether for a possible offense committed years ago. The media quoted people with knowledge of the subject.

“The big government has its eyes on stablecoins, and it comes as no surprise,” Edward Moya, Oanda’s senior market analyst, told CoinDesk.

Although the price of bitcoin has plummeted on the news, falling by around $ 1,000 shortly after the report was released, analysts don’t believe Tether’s news will have a significant impact on the market.

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“Regarding the Tether FUD, we’re not too worried,” Febrocas said. FUD, which stands for “fear, uncertainty and doubt,” is often used to refer to bearish news or rumors. “Bitcoin has completely ignored this news for now.”

Denis Vinokorouv, head of research at Synergia Capital, said the news from Tether is less negative for the market as it is an investigation into the leaders and alleged practices. He said it was not as much of a concern as “an investigation into what Tether is – a stablecoin”.

“So, like last year when BitMEX was investigated, the entity has remained intact and, consistent with regulatory pressures, has increased its [know your customer/anti-money laundering] approaching, ”he added.

Kssis said that with negative headlines continuing to accumulate and with Tether in a fragile market, there could still be “repercussions if investigations point to more serious allegations.”

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