Bitcoin price spike to $64.5K was ‘low-volume liquidity trap’: Analysis
Bitcoin derivatives markets created a short squeeze that took BTC price action 3% higher on Monday.
Bitcoin's price surged to $64,500 on Monday due to a short squeeze created by Bitcoin derivatives markets, according to new data. Short liquidations reached their highest level in almost a month, with 637 BTC liquidated on Monday, a record since July 21. This price movement occurred after BTC hit $62,750, where funding rates between exchanges began to diverge, with shorts dominating on major platforms.
CryptoQuant, an onchain analytics platform, described the event as a "low-volume liquidity trap" and predicted more short squeezes in the future, as funding rates declined. However, the lack of spot demand and inflows to US spot Bitcoin ETFs remain significant hurdles for sustained upside.
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