Elon Musk, who hates short-sellers, causes millions in losses to shorts after changing his Twitter bio to “Bitcoin”. Can this be the start of the BTC short squeeze?
That one word in Musk’s 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.
Today’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 “square off,” or close, the positions. A massive short squeeze like this often puts upward pressure on prices, leading to a bullish move
Data indicates the market was skewed bearish early Monday and some observers were anticipating a price drop, courtesy of increased inflows onto exchanges.
However, sentiment turned bullish after Musk changed his Twitter bio and tweeted: “In retrospect, it was inevitable.” 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.
Google searches for “bitcoin,” a barometer of widespread interest, surged following Musk’s cryptic endorsement of bitcoin. It remains to be seen if increased interest translates into more buying and stronger price gains.
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