Bitcoin Jumps Most in 6 Months as Hopes for 2023 Rate Cut Persist

Bitcoin Jumps Most in 6 Months as Hopes for 2023 Rate Cut Persist

by Ras Vasilisin
11. September 2022
Bitcoin Jumps Most in 6 Months as Hopes for 2023 Rate Cut Persist

Major cryptocurrencies bounced early Friday as traditional market investors shrugged off Federal Reserve Chairman Jerome Powell’s pro-liquidity tightening stance.

Bitcoin (BTC), the leading cryptocurrency by market value, jumped 8.6% to $20,997 and ether (ETH), the native token of Ethereum’s blockchain, which is scheduled to undergo a major technological upgrade next week, rose 4% to $1,705, according to CoinDesk data.

The rally appeared to be touched off by speculation that risky assets, such as stocks and cryptocurrencies, could draw strength from a pivot next year by central banks toward monetary easing as economic conditions worsen and inflation subsides.

MSCI’s broadest index of Asia-Pacific shares except Japan jumped 0.3%. The futures tied to the S&P 500 rose 0.3%, hinting at an extension of a two-day rally, while the European stock futures signaled a positive open. The dollar index dropped 0.7% to 108.80, signaling continued weakness in the greenback.

Bitcoin short squeeze

The rapid price movement led to major trading-position liquidations on crypto exchanges due to margin calls.

In recent weeks many traders had used futures and other contracts to bet that the bitcoin price would drop further – known as “shorting” BTC. The sentiment was so negative that analysts argued the setup might be attractive for a short squeeze, CoinDesk reported last week.

So in the past 24 hours, some $101 million of short positions were liquidated as a result of the sudden upswing in price, the most since the June 14 crash, according to data by Coinglass.

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