The Bitcoin price has shot past the $36,700 level for the first time since May 2022 and currently appears to be preparing an attack on the $37,000 level. It appears that the enthusiasm surrounding the Spot Bitcoin ETF in the United States is slowly reaching a boiling point, possibly indicating that the adoption of the coveted investment product in America is only a matter of time.
As a result of Bitcoin’s explosive rise in recent hours, $140 million in short positions were liquidated.
What is a short position on Bitcoin?
A short position on Bitcoin is a way of trading in which the initiator actually bets on a decline in the price. But how is that possible?
This is possible because trading platforms make it possible to ‘borrow’ Bitcoin from them, which the traders in question then immediately sell. You borrow a Bitcoin from platform A and immediately sell it on the market.
This of course still leaves the obligation to return that Bitcoin at a certain point in the future. At a certain point you have to buy back that Bitcoin from the market so that you can meet your borrowing obligation.
For that reason, people who short Bitcoin hope for price drops, but if the price rises, it can cause problems. After all, they then make a loss because they have to buy back the Bitcoin in question for more money.
We saw that happen in the last few hours, forcing $140 million worth of short positions to buy back their Bitcoin and deliver it back to the lending platform in question.
What’s going on with Bitcoin?
Measured from the beginning of 2023, the Bitcoin price has already risen by 121.16 percent and an increase of 32.47 percent is forecast for the past month. In that respect, we can say that bullish sentiment has completely returned in the run-up to the halving in 2024.
The image above shows that Bitcoin has turned quite green in recent times. Which is a welcome change after the year 2022, in which the Bitcoin price reached a local low of $ 15,500 due to the collapse of FTX in November of that year.
Sentiment has now completely changed again and this seems mainly to be the result of speculation about the arrival of the Spot Bitcoin ETF in the United States.
The increase we have seen in recent hours appears to be the result of the fact that from today it is possible for the American financial markets regulator, the Securities and Exchange Commission (SEC), to accept all twelve applications for a Spot Bitcoin ETF at the same time. moment to approve.