After stalling in the low-$9,000s for a series of days, Bitcoin has finally shown some strength. Over the past six hours, the cryptocurrency has shot higher from $9,400 to a local high of $9,650 on margin exchanges.
BTC’s rally comes shortly after a ~$12 million block of sell orders on Binance was “pulled.” This reduced the resistance Bitcoin faced as it has rallied higher over recent hours.
Short-term BTC price chart from TradingView.com
Due to this move, approximately $3 million worth of BitMEX short positions has been liquidated in the past hour alone. Derivatives tracker Skew.com reports that this adds to the millions of dollars of liquidations that transpired in the past 24 hours.
What’s Behind Bitcoin’s Move Higher?
There is a confluence of reasons why Bitcoin has performed well. They are as follows.
- S&P 500 Is Rallying Once Again: After a tepid open for equity futures, the S&P 500 has rallied 0.5% in the past 24 hours. Although this is far from a “massive” rally, a strong stock market is supportive of higher Bitcoin prices. Both JPMorgan and Goldman Sachs have observed this correlation over the past few weeks. The former institution explained: “Cryptocurrencies have traded more like risky assets like equities—a significant change relative to the prior couple of years.” A separate analysis by pseudonymous trader “PlanB” has suggested that Bitcoin should be trading at $20,000 considering the S&P 500’s levels.
- DeFi/ETH: The past few weeks have seen decentralized finance (DeFi) erupt higher. Coins related to this segment of the cryptocurrency market have shot up by hundreds of percent, leaving Bitcoin in their dust. But now, Ethereum is starting to rally as some DeFi coins sink. This suggests that money is cycling out of DeFi into Ethereum. With ETH rallying, BTC could be thrust higher.
- PayPal May Add Crypto Support: Reports published Monday morning revealed that PayPal is looking to add support for crypto. Sources told CoinDesk that PayPal and Venmo may directly support the purchase and sale of cryptocurrencies like Bitcoin. While details are sparse, many see this as positive for crypto due to PayPal’s user base of 325 million.
BTC breaking above $9,500 brings it above crucial technical resistance levels, such as the local Point of Control. The reclamation of the POC and other crucial supports on a daily timeframe may trigger a greater rally.
As Joe McCann, an AI/Cloud specialist at Microsoft and noted crypto trader, wrote in his Telegram channel:
“$BTC testing the 20 day here. A close above with follow through sends us back to $9900-$10000.”
Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Charts from TradingView.com Millions Liquidated as Bitcoin Clears $9,600 on Back of S&P 500 and DeFi Rallies