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Cryptocurrency Market Cap Clips $300 Billion as Bear Trap Liquidates Shorts


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The cryptocurrency market cap briefly clipped the $300 billion mark on Thursday, a phenomenon that occurred as the result of an apparent bear trap in the Bitcoin futures markets.

bitcoin price
Source: CoinMarketCap

Fueled by a dramatic Bitcoin price rally, the cryptocurrency market cap surged by more than $30 billion, peaking at $301.8 billion before settling back down to a present value of $298 billion. This represents a single-day increase of 12 percent, one of the market’s largest intraday rallies since December.

Bitcoin Price Surges as Bear Trap Liquidates Shorts

The Bitcoin price led the rally, surging more than $1,000 in less than an hour and briefly surmounting the $8,000 checkpoint. At present, Bitcoin is trading at $7,740 on Bitfinex — a 24-hour gain of 11 percent — and has a market cap of just under $130 billion.

bitcoin price
Bitcoin Price Chart

Analysts largely attributed the precipitous surge to a “bear trap,” which occurs when futures and margin traders attempt to short an asset but have their positions liquidated due to a price increase, forcing them to buy at market prices to cover their position.

Matthew Newton, an analyst at crypto brokerage eToro told CCN:

“Whilst there has been some stability in the cryptocurrency markets over recent weeks, we’ve seen a record number of short positions building on major exchanges. When the price began to rise this afternoon, a large number of shorts with big positions were squeezed. The resulting interest from buyers increased momentum, causing the price to jump $1000 in 30 minutes.”

“The ratio of short margin trades versus longs has been increasing recently,” Nick Kirk, quantitative developer and data scientist at Cypher Capital, told CNBC. “Buying volume ticked up today and a lot of these short trades got liquidated, helping fuel the rally.”

Ethereum Price Soars Past $450

The Bitcoin bear trap rippled throughout the market, and most — though not all — altcoins made significant gains against the US dollar. The Ethereum price, for instance, rose 10 percent on Bitfinex and is currently trading at $463. Ethereum now has a $45.5 billion market cap.

ethereum price
Ethereum Price Chart

Altcoins Rally, But Gains Are Uneven

The vast majority of altcoins posted similar rallies, though the gains were far from evenly distributed and one large-cap altcoin — sixth-ranked Litecoin — trailed the index by a considerable margin.

cryptocurrency market cap
Source: CoinMarketCap

The Ripple price made an 11 percent leap to $0.55, raising the third-largest cryptocurrency’s market cap to $21.5 billion. Bitcoin Cash, meanwhile, trailed the index by three percent but still managed to surpass the $700 mark.

EOS, continuing its parabolic midweek rally, is up 31 percent for the day, bringing its price to $8.96 and market cap to $7.1 billion.

Litecoin posted the worst performance among top 10-cryptocurrencies, rising just six percent to $121, while seventh-ranked Cardano climbed by 23 percent.

Stellar and NEO rose 11 percent and 12 percent, respectively, while IOTA’s 14 percent rally to $1.18 rounded out the top 10.

Featured image from Shutterstock.

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Bitcoin Price Watch: BTC Facing Uphill Task Near $3,500

Key Points Bitcoin price is under pressure below the $3,500 and $3,520 resistance levels against the US Dollar. Yesterday’s highlighted crucial bearish trend line is intact with resistance at $3,520 on the hourly chart of the BTC/USD pair (data feed from Kraken). The price may continue to find a strong resistance near the $3,500 and $3,520 levels. Bitcoin price is struggling to climb above the $3,500-3,520 area against the US Dollar. BTC might decline towards the $3,340 support in the short term before higher. Bitcoin Price Analysis There was a slow and steady decline in bitcoin price from the $3,638 high against the US Dollar. The BTC/USD pair was rejected near $3,640-50 zone after it recovered from the $3,253 low. Moreover, it failed near the 61.8% Fib retracement level of the last slide from the $3,851 high to $3,208 low. The price recently declined below $3,520 and $3,480 to enter a short term bearish zone. During the decline, sellers pushed the price below $3,400 and the 100 hourly simple moving average. Besides, the price broke the 61.8% Fib retracement level of the recent wave from the $3253 low to $3,638 high. However, the $3,340-50 support zone is acting as a decent support. On the upside, an initial resistance is near the $3,445 level, above which the key hurdle is near $3,520. More importantly, yesterday’s highlighted crucial bearish trend line is intact with resistance at $3,520 on the hourly chart of the BTC/USD pair. Therefore, the price is likely to struggle near the $3,500 and $3,520 resistance levels. Looking at the chart, bitcoin price may perhaps rise to test the $3,520 resistance before lower. On the downside, if the price finds a strong buying interest near $3,340, there could be a fresh upward move above $3,500-20. Looking at the technical indicators: Hourly MACD – The MACD for BTC/USD is about to move into the bullish zone. Hourly RSI (Relative Strength Index) – The RSI is currently near the 50 level. Major Support Level – $3,340 Major Resistance Level – $3,520 The post Bitcoin Price Watch: BTC Facing Uphill Task Near $3,500 appeared first on NewsBTC.

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