Bitcoin (BTC) surpassed the $79,000 level for the first time in history in an unexpected weekend rally. This rally led to the liquidation of $280 million in bearish trades, signaling a new era in the crypto market. This price action, supported by developments such as the election of Donald Trump as US President and the Fed’s interest rate cut, contributed to BTC gaining over 16% during the week. Weekend gains would have increased market volatility as liquidity decreased.
Bitcoin price rises
Bitcoin (BTC) surpassed the $79,000 level for the first time in history in an unusual weekend rally, leading to the liquidation of $280 million in bearish crypto trades. BTC gained 4%, extending its 7-day gains to over 16%. This rise came after developments that were welcomed by crypto traders, such as the election of Republican Donald Trump as US President and the Federal Reserve’s interest rate cut of 25 basis points.
Weekend price increases are generally considered bullish signals in the crypto market. Since many institutional investors and professional traders are less active on weekends, trading volumes usually drop. Low liquidity means that even smaller transactions can lead to significant price changes, making price movements more volatile. However, a significant price increase on Saturday and Sunday can indicate that individual investors are active in the market. This is considered a bullish signal because it shows that the market is supported not only by institutional investors but also by a wider audience of small investors.
Short positions evaporated
Profit realization among Bitcoin traders remains significantly lower than in previous enthusiastic periods. This indicates that the current rally still has the potential to continue, according to analysis. Meanwhile, bearish crypto bets resulted in losses of over $280 million over the weekend. 103 million of this high loss figure consists of Bitcoin short positions and 70 million of Ethereum short positions. Short positions are bets opened in anticipation of a price decrease. DOGE and Solana (SOL) saw liquidations of over $25 million, indicating that futures participation in tokens other than BTC and ETH is increasing.
A liquidation occurs when an exchange forcibly closes an investor’s leveraged position due to the investor’s inability to meet collateral requirements. Large-scale liquidations can often indicate extremes in the market, such as panic selling or buying. A liquidation chain can indicate that a price reversal is imminent due to an overreaction in market sentiment.
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