BTC Surges 25% Amid Bankruptcy of US Banks, Triggering Short Squeeze and Record Liquidation Volume
In a surprising turn of events, BTC has risen more than 25% amidst the bankruptcy of three US banks, according to data from CryptoQuant. The news comes at a time when the US banking system is facing a crisis with the closure of three banks by the US government. The surge in Bitcoin’s price indicates a shift in trader sentiment, with many traders now becoming bullish.
The rise in Bitcoin’s price has also caused volatility in the futures markets, where funding rates have moved from -0.09 two days ago to the neutral to positive range. When funding rates enter the negative range, it indicates a greater risk for sell traders as it means that bears are dominant. This can lead to a short squeeze, where leveraged traders betting on short positions are squeezed out, causing liquidation.
Since March 9th, $162.1 million of short positions have been liquidated, with $77.7 million liquidated today alone. This is the highest volume of liquidations in short positions since January 11-13, 2023, when Bitcoin slipped out of the accumulation zone between the $15.7k-$19k range and looked for the test in the $24k-$25k region. However, open interest is showing signs of an uptrend, with the MA9d below the MA90d, indicating a potential confirmation of the starting uptrend where volatility is increasing along with trading interest.
Typically, open interest increases during a rising price trend as most traders are fearful when the price is dropping and stop trading the market. However, the price is currently testing the major resistance level at $24k-$25k, and if it can break through, there is room for increased buying interest, which could push the price towards the next target at $30,000.
Overall, the recent bankruptcy of US banks seems to have had a positive impact on the price of Bitcoin, as traders become more bullish. With ongoing volatility in the futures markets, it remains to be seen how the price of Bitcoin will continue to perform in the coming weeks and months.
Possible End to Bitcoin’s Worst Sell-Off Situation as On-Chain Data Shows Positive Signs
According to data by Glassnode, Bitcoin’s on-chain data suggests that the worst sell-off may be over. The analysis shows that Bitcoin’s exchange position switched from net inflows to net outflows from the previous day. This means that more bitcoins are leaving the exchanges than they are entering them.
The overall Bitcoin supply ratio on exchanges has also reached a low of 11%, the lowest since December 2017. This indicates that investors are continuing to accumulate Bitcoin.
Despite the bankruptcy of US banks, Bitcoin’s price surge seems to be continuing, testing the major resistance level at $24k-$25k. If the resistance is broken, it could open up more buying interest and push the price towards the next target of $30,000.
In conclusion, Bitcoin’s price surge amidst the bankruptcy of US banks is a significant event that indicates a shift in trader sentiment towards bullishness. It remains to be seen how this will impact the overall cryptocurrency market, but for now, it seems that Bitcoin is continuing to gain momentum.
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