3 Drivers Pushing The Bitcoin Price Up by Over 15%, What’s the Next Stop?
- “Bend the knee to the CME”
- Short Squeeze of Epic Proportions
- China President’s Bullish Remark on Blockchain Technology
- Bitcoin Not the only one Enjoying the Gains
On Wednesday, Bitcoin price lost $700 in a few hours and today under 30 minutes, the world’s leading cryptocurrency surged about $900.
From its lowest level today at $7,393, the Bitcoin price surged to as high as $8,525, seeing a jump of 15.3% on Bitstamp.
At the time of writing, BTC has been trading at $8,355, as per Coincodex. Just like on Wednesday, the trading volume also shot up, recording almost $595 million.
Altcoins followed the flagship cryptocurrency, with Bitcoin Cash surging to shot up one level above Tether to claim 4th position.
This relief on lower time frames, crypto trader and investor Josh Rager says should be expected after a strong move down earlier this week. But to be optimistic about BTC's price, Rager wants the price to close above $7,861.
“The trend is still down but in short term trades, sideways can allow a few alts to outperform BTC,”
Rager is not alone in thinking bears aren’t wiped out of the market yet as market analyst Benjamin Blunts says, “if you pull the TL from 7300 it just doesn't look right.” A sentiment trader Credible Crypto agrees with.
With that last bounce off the bottom TL I’m inclined to think this as well now.
— Credible Crypto (@CredibleCrypto) October 25, 2019
However, it can't be helped but to point out that trying to find the bottom isn’t easy and can end up being unprofitable, so seizing the opportunity is really necessary.
Now, what drove BTC price to shoot up this high in a few hours?
“Bend the knee to the CME”
A possible reason for this surge, according to the Crypto twitter could be CME. Today, the last Friday of the month is the expiration date of the monthly Bitcoin contracts on the CME. CME’s each BTC contact equals 5 BTC.
In the past, these expirations have seen an effect on the price, but not always and not usually bullish.
Recently, Dubai-based crypto analyst The Moon told his subscribers on YouTube that Bitcoin has created yet another big gap on CME BTC futures contracts. These unfilled gaps can be an indicator of likely price targets.
For the next move, as BTC has been in a falling wedge or descending channel, he predicted a break to the upside to $8,600.
PS we were all looking at the wrong $btc chart.
Bend the knee to the CME.
Im a poet didnt know it etc. pic.twitter.com/iGgdgdwoqr
— fil₿fil₿ (@filbfilb) October 25, 2019
China President’s Bullish Remark on Blockchain Technology
Another potential reason that has the crypto community bullish on Bitcoin is China’s President XI Jinping saying the country should “seize the opportunity,” and “take the leading position,” in the field of blockchain technology.
Binance CEO Changepeng Zhao also drew the connection between the price going up and China sharing a strong stance on blockchain.
However, it’s not about Bitcoin, a fact emphasized by economist and trader Alex Kruger who said,
“Assume China's president has private blockchains in mind. Blockchain, not crypto. Control and surveillance, not freedom and privacy.”
Calm your panties down…
China said "blockchain", not Bitcoin…
And I doubt they're in it for the reasons you think.
— ฿TF%$D! (@CryptoHustle) October 25, 2019
Short Squeeze of Epic Proportions
A massive short squeeze that caused shorts to cover their positions and close out to prevent any further losses, further drove the price higher.
In a short squeeze, a heavily shorted asset moves sharply higher, forcing short sellers to close out their short positions, adding upward pressure on the asset. These short squeezes that have the short sellers at a loss are triggered by a positive development that suggests the asset may be on a turnaround.
Big squeeze ongoing – $150mln of buy liquidations just went through
BTC +13% last 24h pic.twitter.com/mRvkCpuh1y
— skew (@skewdotcom) October 25, 2019
The expiration of CME Bitcoin futures combined with positive sentiments after China’s take on blockchain technology turned investors and traders bullish. The short squeeze acted as a cascading effect, pushing prices higher.
Bitcoin Not the only one Enjoying the Gains
Today, the stock market also rose following the progress on the US-China trade front. The US and China are close to finalizing parts of phase one deal, the office of the U.S. Trade Representative said Friday.
Strong quarterly earnings also pushed the market higher. Not only Intel (7.4%) but Tesla stocks are also up (15%) after reporting a surprise profit last quarter.
The Dow Jones Industrial Average was up 0.6%, the Nasdaq Composite went up 0.6% and S&P climbed 0.4%, briefly trading above its record high.