The Bitcoin price has risen above $36,700 for the first time since May 2022 and currently appears to be preparing an attack towards $37,000. It appears that enthusiasm for the Bitcoin ETF in the United States is slowly reaching a boiling point, perhaps indicating that the launch of the coveted investment product in America is only a matter of time.
Following Bitcoin’s explosive rise in recent hours, $140 million in short positions were liquidated.
What is a short position in Bitcoin?
A short position in Bitcoin is a form of trading in which the initiator actually bets on a price drop. But how is this possible?
This is possible because trading platforms allow you to ‘lend’ Bitcoins, which the relevant traders immediately sell. You borrow one Bitcoin from platform A and sell it directly on the market.
Of course, there still remains the obligation to return that Bitcoin at some point in the future. At some point you will have to buy this Bitcoin back from the market to meet your borrowing obligation.
For this reason, people who short Bitcoin expect prices to fall, but if the price rises, problems can arise. Ultimately, they will suffer a loss because they will have to buy back the Bitcoin in question for more money.
We’ve seen this happen in the last few hours, forcing shorts worth $140 million to buy back their Bitcoins and send them back to the lending platform in question.
What happens to Bitcoin?
Measured since the beginning of 2023, Bitcoin’s price has already risen 121.16% and is expected to rise 32.47% over the past month. In this regard, we can say that the bullish sentiment before the 2024 halving has fully returned.
The image above shows that Bitcoin has become quite green lately. That’s a welcome change after 2022, when Bitcoin’s price hit a local low of $15,500 following the collapse of the FTX in November this year.
The mood has now completely changed again and this seems to be mainly due to speculation about the arrival of the Spot Bitcoin ETF in the US.
The increase we have seen in recent hours appears to be due to the fact that the US financial markets regulator, the Securities and Exchange Commission (SEC), can accept all twelve applications for a Bitcoin ETF in cash as of today. at the same time. Approval moment.
Source: BTC Direct
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Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
