Bitcoin price rose sharply over the weekend hitting five figures that peaked at $10,200. Following the huge surge that occurred within a few hours, there was speculation throughout the crypto community. Many people wondering what caused the cryptocurrency’s price to rise abruptly. Now, the reason has been revealed putting to rest the uncertainty that has been surrounding the unexpected rally.
The crypto market is one of the major reasons behind the recent surge in Bitcoin’s price from about $9,700 to a high of $10,200. Market activity suggests that many crypto traders resulted to profit-taking once the digital asset’s price begun to rally. The price of major altcoins and some of the best performing token declined substantially during this period as Bitcoin pairs faced sharp rejections across multiple exchanges.
Some of the major altcoins have had substantial price surges recently as the crypto market had favourable opinions about altcoins. However, these strong sentiments seem to have waned following the surge of the leading cryptocurrency. Traders appear to have moved the gains made from altcoins into bitcoin causing the top virtual asset price to rise sharply. This hedging activity suggests that despite the recent altcoins rally, crypto traders are still exercising caution over their altcoins investments.
The recent bitcoin price surge did not come as good news to everyone. Particularly, bitcoin short traders incurred massive losses following the unexpected rally. Upon breaking the $10,000 barrier, the virtual asset’s price triggered the liquidation of over-leveraged short contracts. The continued rise in bitcoin price caused further damage for short sellers once it reached the $10,200 level. The total loss amounting to $74 million.
This is not the first time that a sudden surge in bitcoin price has caused traders some massive losses within a short duration of time. There has been several occasions in which crypto traders have lost over $50 million in a few hours through a series of liquidations for short positions.
The last weekend’s rally has triggered some renewed optimism about bitcoin’s near term price. The crypto community has thrown their support behind the leading cryptocurrency with several members expressing optimism that bitcoin is on course to reach a new all-time high price. The shared enthusiasm is well summed up by a tweet from renowned trader, Peter Brandt who expects bitcoin price to hit $50,000 soon.
That is actually where my head is. Massive symmetrical triangle in $BTC points to ATHs, then $50k
— Peter Brandt (@PeterLBrandt) July 25, 2020
Image courtesy of pixabay
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