Bitcoin Surges 18% to Above $24K
Some $160 million in short positions have been liquidated on Monday.
Bitcoin (BTC), the world’s largest cryptocurrency by market capitalization, surged 18% to over $24,200 over the past 24 hours even as fallout from the implosion of Silicon Valley Bank widened.
The cryptocurrency, which was recently trading above $24,200, registered its largest daily increase in almost a month, according to data from TradingView. Earlier Monday, bitcoin reached a daily high of about $24,500.
The reasons for the upturn are still unclear, particularly as cryptos often decline during periods of unrest in financial markets. But the surge has come amid the sort of short squeeze that historically sends prices higher. Data from Coinglass shows that traders liquidated $300 million worth of crypto positions on Monday. A full $140 million worth of these liquidations were bitcoin liquidations, with $160 million in short positions.
The bitcoin rally comes as some investors are recognizing the fragility in the central banking system, according to Sean Farrell, head of digital-asset strategy at FundStrat.
“Bitcoin is leading the market because there is a cohort of investors that recognize the fragility of central banking and the solutions BTC offers,” Farrell said.
“Crypto is responding to the anticipated change in liquidity conditions as it should,” he added.
Risky assets surged on Monday after U.S. regulators said on Sunday they would create a deposit insurance national bank to protect insured depositors of Silicon Valley Bank.
“This is where the market believes now that the rails between crypto and TradFi have disappeared, hence we see traders buying what is left of the market and willing to pay a premium,” said Laurent Kssis, crypto trading adviser at CEC Capital.
The increase in price also comes as President Joe Biden said he will call on Congress and bank regulators to strengthen rules for financial institutions following the Silicon Valley Bank and Signature Bank (SBNY) collapses over the past week.