Bitcoin reached a four week high Monday. This was due to liquidation of short positions that had been accumulated during the recent three-month downtrend.
It reached $44,524.18, its highest level since mid-January. The last time it was up 3.8% was at $44,024. Bitcoin has seen a 35% increase in value since hitting a low of roughly six months on January 24,
The second-largest digital currency by market capitalization, Ether, reached a peak of $3180 in three weeks and was up 3.1% to $3,153.21 at the time of writing. In late January, it fell to a six month low. However, ether, which is the token that powers the Ethereum blockchain has risen about 47% since then.
“The current rise was after substantial range-bound price movement that saw volumes drying out and shorts increasing,” stated Joe DiPasquale chief executive officer of BitBull Capital which manages crypto hedge funds.
He said that “typically, when the market is heavily leaning towards one side of trades, too long, or too short”, the price can move in order to offset that weight and squeeze situations.”
According to Glassnode’s latest research report, Monday’s, the blockchain data provider, Glassnode stated that its charts indicated that bitcoin shorts were under pressure last week with a slight skew towards side liquidations.
It also stated that the scale of the liquidation is still “fairly poorluster”, suggesting that a short squeeze is only one factor driving the rally in Bitcoin.
According to CoinShares, the crypto market has been in recovery mode over recent sessions. Last week saw institutional inflows totaling $85 million. This was the third consecutive week of inflows totaling $133,000,000, according Monday’s report.
Bitcoin led all inflows with $71 million. This is the largest inflow since December early and the third consecutive week of inflows with $108 million. Bitcoin posted net outflows in excess of $60 million for the year.