Bitcoin soar to 25k What was the cause

Bitcoin jumps to $25,000; What was the cause? 2023


In the last 24 hours, and contrary to the expectations of a large part of traders, the price of Bitcoin has increased by more than 9% to reach its highest level in the last 3 weeks and trade in the range of $24,500; But what was the reason for Bitcoin’s surge, despite the recent volatility in the price of stablecoins and a new wave of bankruptcies between banks associated with companies in the field of digital currencies?

According to CoinDesk, Bitcoin’s jump likely came as a surprise to traders who had bet on lower prices after two major cryptocurrency-related banks closed last week and the coin lost its dollar-peg rate.

More than $100 million worth of Bitcoin short positions were liquidated as prices rose on Monday. This was the most amount of capital liquidated since January 14 (January 24); When the increase in the price of Bitcoin caused the liquidation of 500 million dollars of capital in the futures markets.

Data from analytics platform CoinGlass shows that 78 percent of all Bitcoin futures traders suffered losses during Monday’s liquidations. These losses occurred mainly in digital currency exchanges Binance, OKX, Hobby and Baybit.

Liquidation means that an exchange forcibly closes a trader’s leveraged trading position due to the loss of part or all of the trader’s initial margin (deposit). This happens when a trader does not have enough capital to maintain his trading position.

One day Bitcoin price chart.

A high volume of liquidations can be a sign of a sharp price reversal from a trend ceiling or floor, possibly allowing traders to determine the direction of their trading position accordingly.

Bitcoin price rose as US bank stocks fell sharply on Monday; Because the collapse of Silicon Valley Bank last week intensified the fear of other banks facing similar crises.

Thus, the data shows that this price trend is formed in the spot market. Bitcoin open volume remained below the March 9 level until Tuesday, when the price returned above the $23,500 range. This means that the price jump was created by investors who bought Bitcoin in the spot market instead of trading it in the futures market.

In addition, digital currency exchange Binance also announced on Monday that it will convert $1 billion of stablecoin Binance USD in the industry recovery fund into Bitcoin, Ethereum, Binance Coin and other tokens, which may have contributed to the price increase. .

Meanwhile, a 2.2 percent decline in the Dow Jones Asia, 2.5 percent in Japan’s Nikkei 225 and nearly 1 percent in Hong Kong’s Hong Kong on Tuesday reflected the impact of the US market trend on Asian companies.


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