Bitcoin Short Squeeze Revives Trading Volume And Volatility
July 27 2021 - 8:21PM
NEWSBTC
After what seems like a thousand years of stability and a slight
downtrend, bitcoin is back. Volatility is wreaking havoc. Trading
volume seems to be picking up steam. And, more importantly, the
community’s morale is climbing up. In any case, what do the data
and the on-chain analysis say? Are the numbers high enough to
justify the excitement? Let’s explore them. BTC price chart for
07/27/2021 on Bitstamp | Source: BTC/USD on TradingView.com Trading
Volume Is Climbing, But, Is It A Trend? According to Arcane
Research, “On Monday, the daily trading volume in bitcoin reached
$9.2 billion, which is the highest daily trading volume in bitcoin
recorded since June 22nd.” That could be a good sign of a healthy
market making a recovery, but hold your horses. The market had been
stagnant for a while, and not only that, before the spike we had
“Four consecutive days bellow $3 billion.” Related Reading |
Bitcoin Trading Volume Plunges To Lowest Level Since 2020 Even
though $9.2M is a promising number, take into account that
“Overall, the 7-day average trading volume remains substantially
below its yearly average and trading activity in bitcoin seems to
be low so far this summer.” From where we stand, there’s no way of
knowing if the market is picking up or if we are witnessing a
statistic anomaly. We’ll have to wait and see. BTC Daily Volume is
rising | Source: Arcane Research Volatility Is Back In Action, But,
Is It Here To Stay? Even though traditional finance is afraid of
it, the Bitcoin community thrives on volatility. And, again
according to Arcane Research, “Yesterday, the markets moved towards
the upside, leading the 7-day volatility to climb above the 30-day
volatility.” So, volatility is back, but, are we off to the races?
Don’t be so sure. “Last summer, a similar event occurred when
bitcoin was consolidating throughout the summer on declining
volatility, before seeing a sudden 11% gain on July 27th, 2020.
Then, the market corrected back toward the lower end of the
consolidation range quickly thereafter and remained within its
consolidation range throughout the summer.” Are we in the same
cycle, though? So far, 2021 has been insane for Bitcoin. All the
predictions fell through. All the models seem to be failing. And
there’s hope. The bull run might be over, but it also might not.
And if we are still in the bull run, there’s no point comparing the
situation to last summer. We might be in a whole different ball
game. BTC/ USD Volatility is wreaking havoc | Source: Arcane
Research The Short Squeeze That Generated This Everything happened
“On Monday, $750 million worth of shorts got liquidated, as bitcoin
climbed from $34000 to $39500. This is the largest short squeeze
we’ve recorded in bitcoin, surpassing the squeeze amid bitcoin
breaking its 2017 ATH on December 16th-17th.” That catastrophic
event shifted Bitcoin’s tectonic plates and put volatility, trading
volume, and everything in motion. How long will it last, though?
That’s the question. Related Reading | $150 Million In Short
Squeeze Liquidated As Bitcoin Scales Above $53,000 About the short
squeeze is worth noting that “Binance changed their API following
the May 19th crash,” so the numbers might not be precise. In fact,
according to Arcane Research, the situation might’ve been “severely
underestimated by Bybt. This short squeeze was, therefore, very
likely far larger than $750 million.” Featured Image by Steve
Buissinne from Pixabay - Charts by TradingView
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