Cryptocurrencies including Bitcoin and Ether soared on Tuesday after the US SEC asked exchanges to update their regulatory filings for Ether exchange-traded funds (ETFs). Bitcoin soared to $71,957 and Ether last reached its April 9th level of $3,720.80.
This dramatic rally was driven by a massive short squeeze, resulting in the largest liquidation event since 2022. Meanwhile, if the price of BTC reaches $743,000, $1.4 billion worth of Bitcoin shorts are at risk of being liquidated.
Bitcoin Sees Record Liquidation
Yesterday, the price of Bitcoin surged by over 8%, recording one of the best days of 2024, catching the attention of both investors and analysts. The surge was primarily driven by a short squeeze, where the sudden price increase forced traders holding short positions to buy back Bitcoin to cover their losses.
This buying pressure fueled Bitcoin's price movements, resulting in one of the most notable one-day performances in recent memory.
Meanwhile, approximately $259 million in buy and sell contracts were liquidated in the futures market in one day. This liquidation not only caused significant cash buying pressure, but also became the largest short-term contract liquidation event since 2022.
Bitcoin ETF records huge inflows
However, recent inflows reflect increased interest in Bitcoin spot ETFs as investors react to intensive institutional investment and expected interest rate cuts.
Meanwhile, the Spot Bitcoin ETF saw inflows for five consecutive days last week, posting $948.3 million in inflows. Ark Invest and 21Shares ETFs led the way with inflows of $68,281,200, followed by BlackRock's iShares Bitcoin Trust with $66,352,000 and Grayscale Bitcoin Trust with $9,347,500.
$1.45 B short position @74.3k
As the price of Bitcoin continues to rise, fear of missing out (FOMO) is expected to drive further buying pressure from retail investors. However, analysts warn that a short-term correction could emerge given the recent volatility and rapid price changes.
Bitcoin's price remains just 3% below its all-time high (ATH) of $73,750, sparking speculation about its next move. If the current bullish momentum continues and Bitcoin crosses the $74,300 level, it could prompt the liquidation of approximately $1.45 billion of short positions.
