Bitcoin (BTC) price rose to $ 10,272 on July 26 in an unexpected weekend rally. Made long-term contracts for $ 74 million on BitMEX alone, and surprised many traders.
There seem to be two main reasons for the sudden rise of bitcoin from $ 9,700 to more than $ 10,200. This is to get rid of shorts and traders who take advantage of alt cryptocurrencies (altcoins).
Profits appear in the form of Bitcoin screws
When the price started to rise, the large alternative currency symbols as well as the well-functioning DeFi symbols began to fall. Ethereum dropped from $ 322 to $ 311, and DeFi codes including Aave and YFI have dropped sharply.
The simultaneous abandonment of large altcoins and the rise in bitcoin prices indicate that traders have benefited from recent altcoin deals. When traders convert altcoins gains to bitcoins, it may have triggered a trend in BTC while altcoins are down.
For example, ETH rose from $ 247 on July 23 to $ 322 at its current peak, hitting 30% gains. Despite the strong feeling in the alternative currency, investors can be more careful in protecting their profits.
Bulk adjustments for short contracts
When Bitcoin initially exceeded more than $ 10,000, this ended the nested short contracts. When BTC reached $ 10,200, it caused a series of liquidations totaling $ 74 million.
Bitcoin has gone through many milestones with over $ 50 million in short or long contracts. But for this to happen within a few hours, it is less common.
The massive redemption of long contracts of $ 10,000 also indicates that between $ 10,000 and $ 10,200 remains a large resistance area. Once the price of BTC reached $ 10200, the price fell below $ 10,000, registering a short spike.
Investors are optimistic about the short-term development of BTC prices
Given the bitcoin price hike in recent weeks, some industry leaders and investors have expressed optimism about BTC and ETH.
“You are ready?” Grayscale CEO Barry Silbert tweeted in a Tweet with Ethereum exiting the $ 280 resistance level on July 25.
Meanwhile, the famous trader Peter Brandt believes that the price of bitcoin will reach an all-time new high and will eventually reach $ 50,000. He said:
“It just caught our attention. The fixed symmetric triangle in $ BTC points to ATH and then $ 50,000.”
However, some variables can affect the short-term movement of the BTC price. Firstly, Bitcoin's funding rate is over 0.04% on BitMEX. This is almost four times higher than the average funding rate of 0.01%. This means that most of the market is long.
For Ethereum ETH code, the financing ratio is higher than 0.1%, indicating that the rally is starting to rise. In February, the ETH price fell to $ 280 when the financing rate exceeded 0.2% and when the majority of the market was hungry for the asset.
Second, since October 2019, the main psychological level of Bitcoin has reached $ 10,000. If the price of BTC drops to $ 10,200, it will still be lower than the previous peak in February 2020 at $ 10,473.
While in the long term it will be called a low rally, it can appear that the price of BTC has not exceeded just a range for several months.