On June 18, within minutes, the bitcoin price climbed from $9,300 to over $10,500 across major crypto exchanges, triggering the entire market to recover swiftly.
Analysts have generally attributed the abrupt surge in the bitcoin price to the occurrence of a short squeeze on margin trading platforms like BitMEX.
Big Short Squeeze: Is It Sustainable for Bitcoin?
On margin trading platforms, a short squeeze occurs when a large buy order triggers many short contracts to become liquidated, pushing the bitcoin price up temporarily.
According to Alex Krüger, a global markets analyst, bears or sellers were in control of the bitcoin market throughout the past several days until the short squeeze happened, which was difficult to anticipate with conventional technical analysis.
“Bitcoin just moved by more than nine percent in four minutes. That’s how trends die. Bears were in control despite yesterday’s relief rally. Until now. All those who sold yesterday’s pullback got run over. No technical analysis could have predicted that squeeze until it was already halfway underway. Bears were fully in control until slightly past 10:30 EST,” he said.
Stocks take the stairs up and elevator down.
Cryptos take the elevator down and rocket launcher up.
— Alex Krüger (@krugermacro) July 18, 2019
Prior to the recovery, several technical analysts anticipated the bitcoin price to rebound from its pullback earlier this week.
One technical analyst said that while $8,000 remains a viable short-term target for bitcoin, a spike to $10,400 is a likelihood. The analyst wrote on July 18:
“IMO there is still a good chance BTC will see the $8000s; I’m just watching how high the bounce goes from here. 10.4 would be ideal.”
Following the recovery, the analyst noted that if bitcoin remains above an important support level in $10,850, it could sustain its momentum throughout the near…