Cryptocurrencies rally after suspected short squeeze
A suspected short squeeze drove prices of cryptocurrencies higher on Wednesday, pushing bitcoin to a two-week high above $6,800.
Cryptocurrency exchanges have reported near-record levels of short positions – speculating on continued losses for digital currencies.
Speculators betting on these continuing losses – short sellers – may have been “squeezed”, or caught on the wrong side of their trade after a recent modest rally – forcing so-called “short covering”, meaning they have to buy back the assets to cover their bets and driving a sharp rally.
Bitcoin hit a peak of $6,840.80 on Wednesday, its highest level since 7 August.
Investors hit social media welcoming the rally. Cheds Trading said on Twitter: “Bitcoin bulls just put a major down payment on a reversal.”
Price round up
Here’s a round-up of Wednesday’s price movements for the top 10 cryptocurrencies at 11am [London time]:
- Bitcoin +5.4% at $6,689
- Ethereum +2.1% at $285.14
- Ripple +1.8% at $0.34
- Bitcoin cash +2.1% at $550.04
- Eos +3.5% at $5.08
- Stellar lumens +2.2% at $0.22
- Litecoin +3.8% at $57.45
- Tether -0.2% at $1
- Cardano +0.8% at $0.10
- Monero -0.5% at $95.21