Bitcoin Short Squeeze – 230 million liquidated

The recent increase in bitcoin has prompted many to ask what the reason was? Some analysts quoted institutional money, while others pointed out that it was positive technical data and a short push.

BitMEX’s CEO Addresses Short Squeeze Theory

According to the Bitcoin Code

According to Business Insider, Bitcoin’s recent move from $6,800 to $7,400 has triggered a debate over whether it was the result of a short push, technical indicators or positive fundamental news. Mati Greenspan, an analyst from eToro*, commented on the result is Bitcoin Code the increase in a telephone conversation:

„The assumption is that this is a combination of a kind of short squeeze and new money…. Liquidity in this (crypto currency) market is always somewhat thin. It does not have the same processes and automatisms as most traditional systems. „Sure, there’d be shorts to be liquidated.“

Analysts from the London-based block exchange start-up contacted us via e-mail:

„While we have seen several stop runs in recent months aimed at the liquidation of long positions, these rapid price movements seem to be driven by the cascading reactions caused by the closing of short orders, i.e. those who bet against the market have been forced to close their positions.

Arthur Hayes, CEO of Bitmex*, the Bitcoin trading exchange, recently visited CNBC to talk about the short squeeze theory with which he is well acquainted as his platform for crypto short selling is notorious.

A short squeeze is a term in the financial markets that defines a situation in which an investment property rises sharply and forces short sellers to minimise their losses, which leads to a kind of snowball effect and further increases the price.

Short positions on Bitmex in the amount of 230 million dollars liquidated
After the twenty- to thirty-minute rise Bitcoin experienced on Tuesday morning, the CEO explained that the BitMEX stock market liquidated $230 million worth of short positions.

While this may be an indication to some that this is a short pressure, Hayes made it clear that his exchange functions as a futures market, meaning that there is always a long position corresponding to a short position. This statement indicates that there should not be too great an imbalance between the two species, which slightly discredits the short squeeze theory.

As Barry Silbert and Tom Lee noted in previous fast money shows, it is likely that the increase had more to do with a combination of positive technical data and strong fundamental news.

Arthur Hayes: Bitcoin will re-test $5,000 before reaching $50,000
Despite the new confidence in the market, Hayes believes that this reversal will not last long, as Bitcoin has not yet „seen the worst“.

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