Bitcoin (BTC) has surged back to the $62,000 level after experiencing a major sell-off earlier this week.
On the morning of Friday, August 9, 2024, BTC saw a sharp increase, pushing its value to a peak of $62,500 before a slight correction. As of this writing, Bitcoin is trading around $61,300, marking a 7% gain over the last 24 hours, according to data from CoinMarketCap.
This rebound not only brings renewed optimism to Bitcoin investors but also positively impacts several other major cryptocurrencies. For example, Ether has jumped by 8% and is now trading around $2,670, while BNB and Solana have risen by 4% and 3%, respectively.
Among other altcoins, some of the highest gainers include AVAX (+7%), LINK (+6%), PEPE (+10%), and NEAR (+11%).
Pressure Mounts on Short Traders
The current market conditions have put significant pressure on traders in the crypto derivatives market who have taken short positions, with $159 million, or about IDR 2.5 trillion, being liquidated out of a total of $221 million, equivalent to IDR 3.5 trillion, according to CoinGlass data.
This rise comes just a day after Morgan Stanley, the largest wealth manager in the United States, allowed its 15,000 financial advisors to recommend Bitcoin ETF products to their clients, as reported by Cointelegraph.
Two products recommended by Morgan Stanley include BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC).
Bitcoin Holds Firm After Crypto Black Monday
The current rally suggests that Bitcoin and other cryptocurrencies have weathered the tough period known as Crypto Black Monday, a term coined by the crypto community to describe the sharp decline on Monday, August 5.
On that day, Bitcoin’s price plummeted from its starting level of $65,000 to a low of $49,751, a level not seen since February 2024. This drop also affected other cryptocurrencies, such as Ethereum, which fell by 23% to $2,100. The total liquidation at the time reached $1.03 billion, with the majority of traders holding long positions suffering significant losses.
Now, some traders argue that the relatively quick recovery in prices might be a bear trap, where experienced traders temporarily sell Bitcoin to drive down the asset’s price and trap short-sellers.
Meanwhile, analysts from JPMorgan suggest that the positive factors driving Bitcoin’s price increase and the broader crypto market have already been priced in.
These factors include Morgan Stanley’s support for Bitcoin ETFs, political support in the U.S. for favorable crypto regulations, and the efforts to return funds to Mt. Gox creditors.
“Given the limited risk in Bitcoin futures on the CME and the still-vulnerable equity market conditions, we remain cautious about the crypto market despite the recent correction,” said JPMorgan’s analyst team, as quoted by CoinDesk.
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