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Analyst: After Tesla Reinforced Rally, 50 Thousand Dollars is on the Way for Bitcoin!

Bitcoin (BTC) on February 9, a day after Tesla’s $1.5 billion in BTC was revealed in the US Securities and Exchange Board (SEC) filing; extended its rally above $46,000. After the news of Tesla’s acquisition began to spread, on February 8, the price of BTC on major exchanges rose from $ 39,000 to $ 45,000 in a very short time.

Bulk Bitcoin liquidation

As the Bitcoin price initially rose to $45,000, the short position at $500 million was liquidated.

The term liquidation in the Bitcoin futures market means that the BTC price moves rapidly beyond the liquidation prices of futures contracts within a short period of time. For example, if a trader borrows 10 times his base capital and buys and sells $10,000 to $100,000 worth of Bitcoin positions; It is liquidated after a 10% price movement.

According to Bybt.com’s information, $1.34 billion futures positions in the futures market were liquidated in the last 24 hours. According to Cointelegraph analyst Joseph Young, this shows two trends. First, the derivatives market is overrun with short positions. When the Tesla news broke, hundreds of millions of dollars were liquidated in a matter of hours, causing a massive short squeeze.

Second, this situation; Even after Musk changed his Twitter bio to “Bitcoin” on January 29, 2021, it shows that many investors did not expect Tesla to actually invest in Bitcoin.

What’s next?

Meanwhile, crypto traders are being cautious due to the very high funding rates on major futures exchanges, according to the analyst.

Funding rates increase when the majority of the market buys Bitcoin or opens a long position. When funding rates are too high, the market suffers a long squeeze that can cause a heavy drop in the short term.

However, a crypto trader known as “Loma” says the market is not very confident now. He said that when a moment comes when traders are so confident and not expecting a big drop, a correction is likely to occur:

“To the point where people start talking about how impossible it is for us to drop 70-90% before I even consider closing my spot BTC positions. I want you to come. I remember thinking it was impossible for BTC to drop below $10,000 in 2018. But we went down to $3,500. Never say never.”

Meanwhile, CryptoQuant CEO Ki Young Ju emphasized that there is newfound buyer demand due to the massive influx of stablecoins into exchanges. According to Ki Young Ju, this indicator will likely act as a catalyst for BTC:

“Call me crazy if you want, but I think we’ll see $50,000 soon. I observed a new stablecoin deposit signal.”

Posted in Crypto World

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