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Bitcoin News

Over $90 Million Worth of Bitcoin (BTC) Shorts Closed

wo days ago, a cryptocurrency trader, Crypto Monopoly, posted on Twitter that over $90 million worth of Bitcoin (BTC) shorts were closed within

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Over $90 Million Worth of Bitcoin (BTC) Shorts Closed

Two days ago, a cryptocurrency trader, Crypto Monopoly, posted on Twitter that over $90 million worth of Bitcoin (BTC) shorts were closed within minutes. Coincidentally, the liquidation—and obvious loss came a few hours after Bitcoin rallied, retesting $8,500 and printing new 2019 highs.

While some traders believe that this scenario always happens when someone makes a claim, others think that a dump is on the way. Even so, market participants are skeptical believing at current state, the market is somehow manipulated and the last six week’s pump won’t be sustained.

According to a crypto enthusiast on the Twitter thread, “the market starts to correct lol, we need a 20 to 30% correction for this market to be healthy, blow off tops are never good.” Another concerned supporter chimed in, stating that sellers were underwater and couldn’t take it anymore, forcing them to liquidate their positions.

Since then, the price of Bitcoin has dropped roughly 10 percent in the last 24 hours. At the time of press, Bitcoin (BTC) is changing hands at $7,300 mark. While the BTC price has dropped a little over the past 24 hours, liquidating Bitcoin shorts is bullish for the cryptocurrency. Some traders are touting the Bitcoin price to resume its upward trend after this correction.

Historically, futures market does affect Bitcoin prices because traders can take both sides of trades through puts and calls. We can draw this observation from Dec 2017 launch of the CME and CBoE Bitcoin Futures that came before last year’s crypto winter.

Usually, futures market traders seek to gain by playing the arbitrage game, and some analysts believe that this leaves Bitcoin’s price open for manipulation. Then again, most crypto observers fear that institutional investors and other traders may decide to short Bitcoin by selling off a large quantity of the crypto so as to plunge its price and make profits in the process. Afterward, the traders would purchase the cryptocurrency at a depressing rate.

Futures and Bitcoin Prices

Last month, Bitcoin started the Bull Run that saw it surpass the $5,000 mark. Expectedly, the resurgence forced liquidation of Bitcoin positions in the futures market. This injection of demand no doubt contributed to the pump and the base to early May record volumes and this week’s new 2019 highs. At that time, roughly $30 million worth of BTC was shorted on BitFinex, and this led to a drop of approximately 27 percent.

Jason Lee is a writer for various crypto publications and manages a small team on Medium. His love of technology and inquisitive nature set him up with crypto back in early 2016 and he hasn’t looked back since. In his spare time, Jason enjoys rock climbing and wakeboarding.

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