Leveraged bets against Bitcoin (BTC) lost more than $150 million in the past 24 hours as prices surged 10% for the biggest daily gain since October, spurring calls for a new bull market.
Bitcoin briefly crossed the $57,000 level early Tuesday to reach its highest price since November 2021 on the back of multiple catalysts, such as rising exchange-traded fund (ETF) volumes and institutional buying.
Short covering may have contributed to the asset's strength since the beginning of this week. Data from CoinGlass shows that short bets have lost more than $180 million since Sunday. However, open interest jumped from $48 billion to nearly $54 billion – showing bullish bets rising as traders anticipated volatility.
Liquidation occurs when the exchange forcibly closes a leveraged trader's position due to a lack of margin. This occurs when a trader lacks sufficient funds to keep the trade open.
Large liquidations can indicate a local top or bottom of a sharp price movement, which may allow traders to position themselves accordingly.
Bitcoin's bump has boosted the broader cryptocurrency market. Ethereum (ETH), Solana's SOL, and Cardano's ADA are up 8% in the past 24 hours, while Stacks (STX) — a second-tier Bitcoin token — are up more than 25%.
Market watchers have said that Bitcoin is firmly in a “new bull market” and could see a significant rally as the expected halving event approaches.
“Bitcoin’s decisive rise signals the actual beginning of a new bull market,” Alex Adelman, founder of Lolli, said in an email to CoinDesk. “The major price movements are driven by absolute positive market sentiment and continued Bitcoin ETF inflows, which have reached new daily highs with today's rally.”
“With the Bitcoin halving in just over a month, leading to historically high prices, there is massive upside ahead for Bitcoin,” Adelman added.
The halving is part of the Bitcoin network code to reduce inflationary pressure on the cryptocurrency and will halve the rewards for successfully mining a Bitcoin block. This makes obtaining or mining new Bitcoin more difficult and has historically preceded bull runs.
