The cryptocurrency market is on strong bullish grounds this new week. Bitcoin the benchmark cryptocurrency soared to a price of over $47,000, a price level last held on January 3 of this year.
Large shorts liquidations causing Bitcoin’s price rally
Market behavior analysis tool Santiment argued that the recent price increase was caused by a large number of short-sellers liquidating their positions throughout the weekend. According to their data, financing rates for cryptocurrencies had a massive short ratio at the beginning of the period. Following this, shorts in the Bitcoin derivatives market were forced to liquidate their positions in the cryptocurrency. The result of the liquidations has been a jump in “all of crypto” Santiment wrote.
🚀 #Bitcoin launched to $47.2k, its highest price since January 3rd. The massive amount of #shorts that were growing on exchanges is the primary culprit for this jump. #Altcoins really saw a huge #short ratio at 1pm UTC, followed by $BTC at 6pm UTC, spiking all of #crypto. 🤯 pic.twitter.com/vOi8YBmP4s
— Santiment (@santimentfeed) March 28, 2022
This is confirmed by Coinglass’s liquidations statistics. Futures liquidations totaled $417.57 million in the previous 24 hours, with short liquidations accounting for 78.4 percent of the total. Crypto exchange FTX contributed the highest amount of liquidations ($150.28 million), followed by Binance’s $123.28 million.
There market’s only driving force has been short liquidations. There was also an increase in trading activity over the weekend going by intelligence from CoinMarketCap The total transaction volume of the crypto market surpassed $100 billion, a 63.07% increase over the previous day.
Similarly, the crypto market capitalization now stands at a value of $2.12 trillion, representing a 4.72 percent increase over the last day and a 4.75 percent increase from February levels.
A long-term bull run is a strong possibility, according to this analyst
Analysts believe that the market will reach new highs in the near future under the prevailing market conditions. For Kripto Mevsimi, a verified analyst at CryptoQuant, the current futures market action is a “good thing.”
According to Mevsimi, who wrote a Quicktake on the crypto market analytics platform, the funding rates data was highly bullish for the market, as it was the first time that the metric had remained neutral in the last four market rallies
He argues that it indicates that most market participants anticipate the price surge to break down like in previous times. The expectation, which is also reflected in the absence of heavy long trading, is the best opportunity for a bull run in the market.
“If they keep the same attitude and “disbelief” then this try, can be the best chance for bulls since the beginning of this year to see higher levels,” the analyst commented.
This comes after Bloomberg’s analysis of the technical indicator Fibonacci extensions showed that Bitcoin might reach a price of $54,000 in the near future.
