Cryptocurrency sees one of the biggest days of growth since all-time-high
Many are asking why cryptocurrency prices are up, as the market grows by 15% overnight.
Cryptocurrency traders will be waking up on the right side of the bed this morning, as many inevitably roll over and check their portfolios, which are seeing generous growth amongst the top 200 coins (by market cap), excluding the USD-pegged Tether.
Bitcoin lead the charge, increasing by nearly $1,000 USD in just under an hour, settling at a 13% gain in the last 24 hours, after profit taking set in. Altcoins soon followed, posting substantial gains not seen in weeks.
Of the top 10 coins, EOS saw the most impressive increase, growing by 44% in a single 24-hour period over the last 48 hours. Other impressive movers in the top 10 included IOTA, up by 35%, Cardano up 33%, Ripple by 30% and Ethereum trailing comfortably at 17% over the same 48 hour time period. At the time of writing, prices have begun to contract, as traders look to lock in profits.
Many people are asking what caused the sudden boom, but answers remain unclear and speculative at best. No single event has been attributed to the run, with many observers attributing the "short squeeze" to a shift in market sentiment caused by a flow of sustained news about institutional investment from sources such as George Soros, the Rockefeller family and European Union.
A short squeeze is triggered when an acute price increase causes the liquidation of short contracts, forcing the holders of short positions to sell their position in order to mitigate loss. The sudden selling of all these short contracts helps to further bolster the upward movement of the market, triggering a domino effect whereby more short positions are forced to close. If the short traders attempt to cover their losses by re-buying, the price can go even higher. With cryptocurrency markets in a pronounced down trend recently, it's plausible to imagine a substantial amount of liquidity held in short positions helped to stimulate the squeeze and subsequent price movement.
Note: All price data sourced from CoinMarketCap.com
Disclosure: At the time of writing the author holds BTC, AION, WAN, LINK, QASH, NEO, XMR, ETH, XLM
Picture: Shutterstock
Latest cryptocurrency news
- Ethereum price: Massive slide as market faces bearish pressure
- Ethereum 2.0: Roadmap, timeline and implications
- Bitcoin falls to US$34,000 as confidence in money markets improves with the Biden inauguration
- Bitcoin price lags while regulators raise fears and banks grapple
- Bitcoin price sees volatility around $37,000 with Pantera Capital projecting $115,000
