Bitcoin surpasses $110K, triggering a $280 million cascade of liquidated crypto shorts
Bitcoin, the world's largest cryptocurrency, experienced a brief but significant surge earlier this week, reaching an unprecedented high of over $110,000. Several factors contributed to this price increase, as detailed below.
1. **Global Liquidity Boost**: The expansion of the global money supply, reaching an all-time high of over $55 trillion, played a significant role in boosting Bitcoin's price. This increased liquidity across financial markets supported higher valuations for risk assets like cryptocurrencies.
2. **Eurozone Monetary Expansion**: The Euro Area's broad money supply (M2) increased by 3.55% year-over-year, contributing to global monetary expansion. This expansionary monetary policy in major economies supported bullish sentiment in the crypto market.
3. **Institutional Adoption and Regulatory Clarity**: Major financial institutions are increasing their exposure to cryptocurrencies, and improving regulatory clarity in key markets is also contributing to the surge. This institutional involvement helps drive positive market sentiment.
4. **Positive Sentiment from Other Cryptocurrencies**: The performance of Ethereum and other altcoins also supported Bitcoin's rise. When these cryptocurrencies show strength, it can create a broader positive sentiment across the crypto market.
5. **Trade Deal and ETF Launch**: President Trump's trade deal with Vietnam, along with the successful launch of the Solana staking ETF, may have boosted risk asset sentiment generally, benefiting Bitcoin.
This surge in Bitcoin's price led to a significant liquidation of short positions across the crypto market, with over $280 million in short positions being liquidated. This occurred because short sellers were forced to cover their positions as the price rose rapidly, exacerbating the upward momentum.
Ethereum also saw $91.2 million in shorts liquidated, and U.S. spot Bitcoin ETFs saw inflows of $407.8 million on Wednesday. Ethereum has climbed 5.5% over the past 24 hours, reaching a high not seen since mid-June, hovering around $2,600.
Despite the recent surge, Bitcoin is just 1.8% from last month's all-time high of $111,814. If the price holds above the support levels of $105,000 to $102,560, the bullish momentum may continue.
Looking ahead, several other crypto ETFs are expected to be approved by the SEC this year, including a basket of other Solana funds. The U.S. Rex-Osprey Solana + Staking ETF generated $12 million in first-day inflows on Wednesday. According to Bitunix analysts, Bitcoin has broken through its short-term descending trendline, approaching the key resistance level at $110,348.
However, it's important to note that the global cryptocurrency market cap has decreased by 0.3% over the past 24 hours, totaling $3.48 trillion. Gold climbed and the U.S. dollar came under pressure as a result of the employment report, and the crypto market reacted positively.
In conclusion, a combination of factors, including global liquidity boost, monetary expansion, institutional adoption, positive sentiment from other cryptocurrencies, and trade deals, contributed to Bitcoin's brief but significant surge. The subsequent liquidation of short positions further propelled the price upward, creating a dynamic and intriguing market landscape.
- Bitcoin, the world's largest cryptocurrency, recently experienced a significant surge, reaching an unprecedented high of over $110,000.
- The expansion of the global money supply, reaching an all-time high of over $55 trillion, played a significant role in boosting Bitcoin's price.
- The Euro Area's broad money supply (M2) increased by 3.55% year-over-year, contributing to global monetary expansion.
- Major financial institutions are increasing their exposure to cryptocurrencies, and improving regulatory clarity in key markets is also contributing to the surge.
- When other cryptocurrencies like Ethereum show strength, it can create a broader positive sentiment across the crypto market, supporting Bitcoin's rise.
- President Trump's trade deal with Vietnam, along with the successful launch of the Solana staking ETF, may have boosted risk asset sentiment generally, benefiting Bitcoin.
- Ethereum, the second-largest cryptocurrency by market cap, also saw $91.2 million in shorts liquidated, and has climbed 5.5% over the past 24 hours.
- Looking ahead, several other crypto ETFs are expected to be approved by the SEC this year, including a basket of other Solana funds, potentially driving further growth in the crypto market.
