{"id":414268,"date":"2020-02-11T16:42:13","date_gmt":"2020-02-11T16:42:13","guid":{"rendered":"https:\/\/wncen.com\/?p=414268"},"modified":"2020-02-11T16:42:13","modified_gmt":"2020-02-11T16:42:13","slug":"bitcoin-price-just-surged-4-in-minutes-really-because-of-bitfinex-maintenance","status":"publish","type":"post","link":"https:\/\/wncen.com\/news\/bitcoin-price-just-surged-4-in-minutes-really-because-of-bitfinex-maintenance\/","title":{"rendered":"Bitcoin Price Just Surged 4% in Minutes Really Because of Bitfinex Maintenance"},"content":{"rendered":"
Bitcoin price<\/a> just spiked as much as 4% in a matter of just a few minutes, as the market attempts to short-squeeze traders on the margin trading cryptocurrency exchange Bitfinex.<\/span><\/p>\n Bitfinex<\/a> went down for maintenance today, just before the pump began. But why would platform downtime lead to such a move? Let\u2019s look at what this means for Bitcoin price in the days ahead.<\/span><\/p>\n Bitcoin price<\/a> has been explosive all throughout 2020 thus far, rising over 30% since the start of the year and reaching above the critical level of $10,000.<\/span><\/p>\n But after Bitcoin price reached above $10,000 this weekend, the leading crypto asset by market cap quickly fell back below the psychological FOMO trigger level.<\/span><\/p>\n Related Reading | Crypto Fireworks Yet to Come As BitMEX Open Interest Remains Over $1 Billion\u00a0<\/a><\/strong><\/em><\/p>\n Last night\u2019s daily candle closed as a bearish engulfing candle, which typically signals that extreme bearish price action will soon follow.<\/span><\/p>\n However, the candle close may have been a fake-out move designed to trick traders into taking a short position, only for those shorts to be squeezed during today\u2019s Bitfinex maintenance<\/a>. <\/span><\/p>\n The idea is that traders expecting further downside would have opened short positions \u2013 positions they are currently unable to close with the platform being down for scheduled maintenance.<\/span><\/p>\n Soon after Bitfinex went down, Bitcoin price<\/a> began to rocket upward, easily breaking back above $10,000 all the way to $10,400 before falling back to around $10,250 where it is currently trading.<\/span><\/p>\n https:\/\/twitter.com\/awesome1273\/status\/11931397<\/p>\n Traders on Bitfinex<\/a> use leverage to gear their trades by a factor of up to 3.3x, which multiplies any profits or losses made from the position.<\/span><\/p>\n As the price climbs, shorts are either stopped out or traders close out their shorts to cover positions and ensure losses are kept to a minimum.<\/span><\/p>\n But as shorts are closed out, it acts as a buy order of Bitcoin, causing Bitcoin price<\/a> to surge even higher and higher.<\/span><\/p>\n While a short squeeze is underway, fears over a potential long squeeze loom in the other direction. If bulls aren\u2019t able to fully squeeze bearish traders out of their positions, a retaliatory move could result in a violent long squeeze in the days ahead.<\/span><\/p>\n Related Reading | Bitcoin is Setting Up For a Violent Long Squeeze, Which May Trigger New Lows\u00a0<\/a><\/strong><\/em><\/p>\nBitcoin Price Spikes Following Bitfinex Maintenance<\/span><\/h2>\n
Failed Short Squeeze Could Lead to Violent Long Squeeze<\/h2>\n