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Bitcoin‘s (BTC) recent price increase has not only excited investors but also caused significant turmoil for those in high-leverage short positions. Analysts now confidently state that the cryptocurrency has entered a new bull market and expect further gains as the block reward halving approaches.
Continued Rise Possible
The biggest cryptocurrency recorded its most significant daily gain since October 2023, with a 10% increase. BTC briefly surpassed the $57,000 level in the early hours today, reaching its highest price since November 2021. This price increase is associated with various catalysts, including rising volumes in spot Bitcoin exchange-traded funds (ETFs) and increased institutional purchases. Data shows that in just the last 24 hours, leveraged short positions betting on Bitcoin’s decline have been liquidated to the tune of $150 million.
The strength of Bitcoin’s rally was also supported by the closure of short positions since the beginning of the week. Data from CoinGlass indicates that short positions have lost over $180 million in value since the weekend. Nonetheless, the open interest in Bitcoin futures has risen from approximately $48 billion to $54 billion, indicating that traders expect volatility to continue and are feeling more bullish.
The liquidation of leveraged positions is a process where exchanges forcibly close trades due to a lack of margin. Significant liquidations are important as they can serve as indicators of local peaks or troughs in price movements, allowing investors to adjust their positions accordingly.
On the other hand, market observers now indicate that Bitcoin has strongly entered a new bull market and could make more upward moves as it heads towards the expected block reward halving in April. Alex Adelman, founder of Lolli, pointed to positive market sentiment and ongoing spot Bitcoin ETF entries as the driving forces behind the recent price movements, suggesting a tremendous rise for Bitcoin until the block reward halving.
Altcoin Market Also Revitalized
Bitcoin’s upward momentum not only benefited itself but also revitalized the altcoin market. Leading altcoins such as Ethereum‘s ETH, Solana‘s SOL, and Cardano‘s ADA rose by about 8% in the last 24 hours.
Stacks, emerging as a Bitcoin Layer-2 network, saw its STX token rise by over 25% in the last 24 hours, greatly satisfying its investors.
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