In an unexpected shift in market sentiments, the world’s leading cryptocurrency by market capitalization, Bitcoin, has seen a notable spike in short liquidations today, according to recent data from crypto analytics platform Glassnode.
After several days of persisting downturns in funding rates, Bitcoin has experienced a decent rally in price, wiping bearish traders out of the market.
The dramatic shift was preceded by a rapid ascent in Bitcoin’s price, which saw it rally between $105,000 to $107,000 in just a few hours. Following this surge in Bitcoin’s price, traders holding short positions have seen a significant spike in liquidations within the same period.
Notably, Glassnode revealed that total short liquidations rose sharply by 240% from $105K to $359K (24-hour SMA) within 4 hours.
According to the data source, traders had earlier positioned short due to the recurring price dumps experienced across the broad crypto market over the last week, seeing traders increasingly bet on a drop in BTC’s price.
However, the market has resumed an upward trajectory this week, wiping out the short positions opened by Bitcoin traders as momentum turns bullish.
While short squeezes like this have often fueled temporary surges in the price of the concerned cryptocurrency, Bitcoin has continued to surge and is trading at $108,320.14 as of press time, according to data from CoinMarketCap.
Over the last day, Bitcoin has surged decently by 1.90% in its price, trading steadily around the 108,000 mark.
The trading dynamics experienced by Bitcoin today suggest that FOMO traders are increasingly kicking in.
While it appears that a large portion of Bitcoin traders had placed bets on Bitcoin’s price drops, the surge in liquidation has seen traders change positions as they fear they might miss out on the ongoing upsurge in the token’s price.
Nonetheless, further data revealed that 96.6% of the total BTC in circulating supply is in profit following this positive price movement. This implies that only a few Bitcoin holders are suffering losses at BTC’s current price. However, if the bullish trajectory remains, more holders will return to profit.
While Bitcoin had smashed its ATH, setting a new record of $111,970.17 in May, traders are optimistic that the cryptocurrency is set to cross the level.