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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 Cash (BCH) Price Watch: Ready for Uptrend Confirmation?

Bitcoin Cash Price Key Highlights Bitcoin Cash also formed a double bottom reversal pattern and appears to be inching past the neckline. In that case, this could confirm that bulls are back in the game and ready to take price much higher from here. Technical indicators are still reflecting the presence of bearish pressure, though. Bitcoin Cash is attempting to break past the neckline of its reversal pattern to signal that an uptrend is in the cards. Technical Indicators Signals The 100 SMA is still below the longer-term 200 SMA on this time frame to indicate that the path of least resistance is to the downside. In other words, there’s a good chance that the downtrend might still be able to resume. Then again, the gap between the moving averages has narrowed enough to suggest that a bullish crossover is imminent. Once that happens, more buyers could rush in and sustain the climb. The chart pattern spans around $650 to $800 so the resulting rally could be of the same height. However, RSI is already hovering at overbought levels to indicate that buyers are feeling exhausted at this point. Similarly stochastic is indicating overbought conditions and could be ready to turn south, so Bitcoin Cash price might follow suit. BCHUSD Chart from TradingView Market Factors Cryptocurrencies like Bitcoin Cash price drew strong support from news that institutional investors are looking into the space. Most notably, BlackRock reportedly formed a team to look into investments in the space, and confirmation early this week allowed rallies to resume. This could continue to support investors’ optimistic views that a rebound could ensue in the industry after a rough second quarter. Traders are also noting the regulatory developments in South Korea as a reason to see more legitimacy and security in the industry. The post Bitcoin Cash (BCH) Price Watch: Ready for Uptrend Confirmation? appeared first on NewsBTC.

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