Wow. After plunging by 3.5% to $6,850, Bitcoin (BTC) mounted a strong comeback over recent minutes. TradingView indicates that over the past hour, the cryptocurrency has surged some $400, or 6%, tapping $7,250 before retreating to $7,200, which is where the price of Bitcoin is attempting to stabilize now.
According to cryptocurrency research and data firm Skew Markets, at least $16 million worth of short positions on BitMEX were liquidated in this massive surge higher.
What Happened With Bitcoin?
Due to the fact that this jump came straight out of left field, catching most traders off guard, analysts have been left to pick up the pieces of why Bitcoin jumped 6% in minutes.
Many traders have been left bewildered, for the Bitcoin trend just hours ago was decisively negative. Though, some have tried to weigh in.
Matthew Graham, chief executive of Sino Global Capital and an investor focusing on crypto and blockchain plays, posted the below tweet in the wake of the jaw-dropping move, asking if we think “Bitcoin is moving in reaction to geopolitical risk?”
Do we think bitcoin is moving in reaction to geopolitical risk? Fascinating.
— Matthew Graham (@mattyryze) January 3, 2020
Graham, for those who are unaware, is referencing the fact that an hour or two ago, it was revealed that U.S. President Donald Trump ordered attacks on Iranian army leaders. In these attacks, Iran lost some of its most important men miltarily speaking, resulting in global markets going relatively haywire.
Crude oil, for instance, jumped 3%, and gold easily saw a quick $10 gain in the minutes after the reports regarding this Iran-related event were released. With Bitcoin increasingly becoming a macro asset according to some analysts, it may be logical to suggest that the potential of continued conflict between the U.S. and Iran is driving capital towards Bitcoin and other alternative assets deemed safe havens.
Alex Kruger, a cryptocurrency and macro analyst, isn’t too sure about this thesis though. He posted this tweet in the wake of the jump, noting that it’s likely a false narrative due to the fact that Bitcoin moved hours after other assets did.
Talking heads will soon be discussing how bitcoin is a safe haven and is going up because of Iran. Which is absolute nonsense. Round numbers are there to get run over, in both directions. I have a small long so I'll be happy if speculators use the narrative to push prices up.
— Alex Krüger (@krugermacro) January 3, 2020
Considering the aforementioned data regarding Bitcoin futures though, this price jump to reclaim $7,000 might just be a byproduct of a short squeeze in these times of low volatility.
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