One analyst opines that the current Bitcoin rally is driven by whales and we haven’t seen serious short sales so far.
Bitcoin hit $60K for the first time since April 18th today. Zooming out shows considerable recovery. The cryptocurrency has increased 25% in the last 30 days. It has also increased 100% since the crash below $30K in July.
Commenting on the matter was Ki Young Ju, the CEO of CryptoQuant – a well-known data research and analytics company in the industry. He pointed out that the rally was mainly driven by whales and that we didn’t see “large short positions liquidated so far“.
This rally was driven by the purchase of whales, not a small squeeze.
BTC bulk buy market orders on derivative exchanges do not come from short settlements.
1 > There are no large liquidated short positions so far,
2 > Whales have launched long positions since the dive.
To clarify, a short squeeze is an event where the price of an asset rises exponentially because the leveraged short positions are being liquidated (squeezed). This creates a snowball effect where the higher the price, the more shorts are eliminated, further increasing the price.
Looking beyond the above, the fact that there are no large sellouts on short positions can also have other implications. Bybt data reveals that in the last 24 hours, $150 million in shorts were eliminated, which, in fact, is not that significant.
The chart below reveals the number of Bitcoin shorts in Bitfinex.
It can also suggest that there is confidence in the current rally. Given that there is no considerable pressure coming from the metrics in the chain, this could further validate the execution and perhaps drive it even further.
HODLers go HODL
How CryptoPotato reported recently, more than 85% of the total outstanding Bitcoin stock has not changed in more than three months. This means that HODLers have confidence in the cryptocurrency and still show no signs of selling.
In our latest Bitcoin pricing analysis, we talk about the information currently available on the web and what this means for BTC in the near and medium future.
There have been signs of light distribution as the price hits these multi-month highs, but this is to be expected and we discussed it at length in our previous analyses. This may pose some small challenges in the immediate near term, as investors who bought between $55,000 and $58,000 may be looking to break even.
However, it is important to note that network metrics remain firmly optimistic as most groups of HODLers continue to accumulate.