For Elon Musk, whose hatred for short-sellers blazes hot enough to reforge MjÃ¶lnir a dozen times over, the millions in losses suffered by shorts after the Tesla CEO changed his Twitter bio to â€œBitcoinâ€� must make it feel like Christmas and his birthday rolled into one.Â
That one word bio caused the price of bitcoin to spike to a 10-day high of $38,020 and sparked $387 million worth of short liquidations on major exchanges including Binance, Bitfinex, BitMEX, ByBit, Deribit, FTX, HuobiDM and OKEx.Â
The crypto market leader is trading at $37,390 at press time, representing a more than 15% gain from the low of $32,000 seen during the European morning session.
Todayâ€™s short liquidation is the largest since Jan. 2, when exchanges closed $575 million worth of shorts, according to data provider Coinalyze.
Forced closure of short positions happens when the price moves above a predetermined threshold, signaling the liquidation engine to â€œsquare off,â€� or close, the positions. A massive short squeeze like this often puts upward pressure on prices, leading to a bullish move.Â
Market was skewed bearish
Data indicates the market was skewed bearish early Monday and some observers were anticipating a price drop, courtesy of increased inflows onto exchanges.Â
However, sentiment turned bullish after Musk changed hisÂ Twitter bioÂ and tweeted: â€œIn retrospect, it was inevitable.â€�Â The Tesla and SpaceX CEO, who has made no secret of his loathing for short-sellers, may not haven intended to have caused the liquidations, but may have popped the cork on a bottle of champagne after viewing the carnage his bio change wrought.
Related: Are You Running a Bitcoin Node?
To document Elonâ€™s ostensible nod to the leading cryptocurrency, F2Pool, currently the largest mining pool by hashrate, embedded the tech mogulâ€™s latest tweet in Bitcoin block 668,197.
Google searches for â€œbitcoin,â€� a barometer of widespread interest, surged following Muskâ€™s cryptic endorsement of bitcoin. It remains to be seen if increased interest translates into more buying and stronger price gains.Â
â€œI assume the U.S. session will try to follow in lock-step of digesting the news,â€� Vishal Shah, an options trader and founder of derivatives exchange Alpha5, told CoinDesk. â€œTypically speaking, such things would be met with more muted response. But given the backdrop, I think it could be ripe for a follow-through.â€�
So bitcoin is looking north, having pierced a two-week bearish trendline on the daily chart. Resistance is seen at $40,112 (Jan. 14 high), followed by the psychological level of $42,000.
Update (Jan. 29, 14:23 UTC): Adds information about embedding Muskâ€™s latest tweet on the Bitcoin blockchain.
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