Bitcoin ETF Anticipation Fuels Surge to $37K, Sparking Short-Squeeze
Bitcoin surges past $36,000 for the first time in months, spurred by a massive short squeeze and talks of a potential spot ETF approval by the SEC, stirring significant market optimism.
Bitcoin prices have eclipsed the $36,000 level, a high not seen since May 2022, propelled by a robust “short squeeze.” During a four-hour window in early Asian trading hours, around $50 million in liquidations occurred, catalyzing the price increase.
A short squeeze typically triggers when prices leap unexpectedly, forcing those who have bet against the asset to hastily cover their positions, thereby amplifying the upward price trajectory. Notably, over $21 million in shorts were liquidated on the BitMEX platform, with OKX and Binance also experiencing significant impacts.
This bullish trend in Bitcoin coincides with the U.S. Securities and Exchange Commission (SEC) starting conversations with Grayscale about the potential transformation of their Bitcoin Trust GBTC into a spot ETF. This event is keenly awaited, as it is expected to make cryptocurrency investments more accessible to everyday investors.
In line with these developments, analysts have been predicting the U.S. approval of a Bitcoin spot ETF, with James Seyffart, a research analyst at Bloomberg Intelligence, citing a “90% chance” of approval by January 10.
Supporting this rally is the significant buying activity from U.S. investors, as indicated by Glassnode data, which shows the highest optimism in the market since early 2022.
Bitcoin’s surprising rally, peaking at $36,864 on Bitstamp, disrupted expectations and led to the invalidation of certain trading tool signals. This surge has drawn comparisons to the market situation in late January when a previous bull run began to lose steam.
