In a remarkable turn of events, Bitcoin and the broader cryptocurrency market have embarked on a bullish journey as October unfolds. The surge in prices, which catapulted Bitcoin to heights not seen since August 17, was driven by a cascade of liquidations and a compelling short squeeze.
Last Sunday evening, Bitcoin made an astonishing leap, surging over $28,000. This meteoric rise was characterized by an $800 spike around 6:30 pm ET, breaking through the $27,200 resistance level. According to CoinGecko data, Bitcoin was last traded at $28,271, marking a 4.4% increase from the previous day’s value. The surge also triggered substantial liquidations, with $47.4 million wiped out in the futures market, as reported by CoinGlass data. Remarkably, a staggering 90% of these liquidations, totaling $42.9 million, were attributed to short orders.
The synchronized surge in Bitcoin prices and short liquidations strongly suggests the involvement of a short squeeze in the futures market. A short squeeze occurs when the price of an asset surges rapidly, compelling short order holders, who had bet against the market using leverage, to buy the asset at higher prices as the price continues to climb.
Ethereum (ETH) followed suit, mirroring Bitcoin’s ascent by soaring above the $1,700 mark for the first time in five weeks. The surge in ETH’s price led to the liquidation of futures orders valued at $28 million. This upward momentum rippled across the entire crypto market, resulting in a 3.3% increase in the aggregate market capitalization of crypto tokens. The market added nearly $37 billion over the course of 24 hours, reaching a total of $1.16 trillion. Notably, this surge triggered the liquidation of $114.9 million across the crypto market, with shorts accounting for over 85% or $97.8 million of the total, according to CoinGlass data.
In the niche market of the top 100 cryptocurrencies by market capitalization, Solana (SOL) emerged as the leader, boasting a remarkable 13.5% overnight increase. Other major gainers in the past 24 hours included Thorchain (RUNE), Bitcoin SV (BSV), and Render (RNDR) tokens.
Beyond the crypto sphere, the positive sentiment extended to the broader financial landscape, with the US government successfully averting a shutdown by extending funding for the next 45 days. This development seemed to have a positive impact on global market sentiment. US stock market futures opened with optimism on October 2nd, as the S&P 500 gained 17.5 points, trading at 4,312.4 points. The tech-heavy Nasdaq index also started the day with a 0.7% increase above Friday’s closing, breaking the 15,000 level. Coinciding with these market trends, VanEck is poised to launch the first Ethereum futures ETF today, further bolstering positive sentiment.
Historically, October has been a favorable month for Bitcoin’s price, witnessing an upward trend for the past decade, except during the bear markets of 2014 and 2018, as reported by CoinGlass data.
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