Bitcoin Tops $37K for First Time Since May 2022 as Short Squeeze Bumps Prices Amid BTC ETF Optimism

Over $62 million in bitcoin shorts were liquidated in the past 24 hours, contributing to higher prices.

AccessTimeIconNov 9, 2023 at 7:13 a.m. UTC
Updated Nov 10, 2023 at 4:11 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Bitcoin (BTC) prices crossed the $37,000 level for the first time since May 2022 on Thursday, extending the largest digital asset's massive recent rally.

Short sellers – traders who made bets prices will fall – might be exiting positions in a rush known as a short squeeze, fueling the move higher. Data shows just under $50 million in liquidations occurred in a four-hour period during early Asian trading hours, creating a short squeeze that drove prices up. BTC surpassed $36,000 a few hours earlier for the first time in 18 months.

Bitcoin has surged recently amid optimism U.S. regulators will approve ETFs that hold BTC, something some experts believe will lure a flood of investment money into the original cryptocurrency. Those hopes increased Wednesday following a CoinDesk report that the Securities and Exchange Commission has opened talks with Grayscale Investments on the details of the company's application to convert its bitcoin trust, known as GBTC, into a bitcoin ETF.

Bitcoin short squeeze

A short squeeze is an unusual condition that triggers a rapid price rise in any asset – typically beginning when the price jumps higher unexpectedly and short sellers exit their positions, leading to a buying flywheel.

Over $21 million of those shorts were wiped on futures exchange BitMEX, followed by OKX and Binance. This suggests the move could have been driven by market trades based in Asia, where these exchanges enjoy a relatively large user base.

Liquidation refers to when an exchange forcefully closes a trader's leveraged position due to a partial or total loss of the trader's initial margin. It happens when a trader is unable to meet the margin requirements for a leveraged position (fails to have sufficient funds to keep the trade open).

Bitcoin ETFs

Elsewhere, analysts at Bloomberg Intelligence doubled down on expectations of a spot bitcoin ETF approval in the U.S., reiterating a "90% chance" of a launch by January.

"Delay orders were issued by the SEC for BlackRock, Bitwise, VanEck, WisdomTree, Invesco, Fidelity & Valkyrie at the same time," analyst James Seyffart said in an X post. "If the agency wants to allow all 12 filers to launch – as we believe – this is the first available window since Grayscale's court victory was affirmed."

Edited by Parikshit Mishra and Nick Baker.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.

Shaurya Malwa

Shaurya is the Deputy Managing Editor for the Data & Tokens team, focusing on decentralized finance, markets, on-chain data, and governance across all major and minor blockchains.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.