Here is why Elon Musk’s easy Twitter bio change rocketed Bitcoin up 18%

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The value of Bitcoin surged 18% after Elon Musk, the CEO of Tesla and SpaceX, added “Bitcoin” to his Twitter bio.

Bitcoin price
The value of Bitcoin. Supply: BTCUSD on TradingView.com

Why would Bitcoin rally this difficult off of a Twitter bio change?

Musk including Bitcoin to his bio carries extra significance than many can think about.

First, Musk is the richest man on the planet, above Amazon CEO Jeff Bezos.

Second, there are rumors {that a} high-net-worth particular person bought a considerable amount of Bitcoin on Coinbase over the previous week.

The premium of Bitcoin on Coinbase skyrocketed, indicating a big purchase order hit the market. Some speculate that that is probably an individual with a big chunk of capital, pointing in direction of Elon.

There was additionally a excessive stage of sell-side stress on Bitcoin earlier than the rally. The funding charge of main Bitcoin futures exchanges was impartial or barely decrease than the typical 0.01%.

The time period funding charge refers to a mechanism futures exchanges make the most of to realize stability available in the market. If the funding charge is damaging, then it means nearly all of the market is short-selling Bitcoin.

If this occurs, the market is liable to a brief squeeze, which implies the cascading liquidation of brief contracts, inflicting the value of Bitcoin to surge.

The mixture of the thrill round Musk’s tweet and a brief squeeze probably prompted the value of Bitcoin to rally strongly.

As I wrote within the Alpha Alarm newsletter:

“There have been chatters that Musk is perhaps the one accumulating Bitcoin on Coinbase over the previous week. Coinbase noticed excessive premium in comparison with Binance all through the previous week. Bitcoin was buying and selling about $200 greater on Coinbase at peak occasions. This means {that a} high-net-worth investor was shopping for a big quantity of Bitcoin. Musk’s profile change probably prompted FOMO, main folks to assume that Musk was the one bidding on Coinbase.”

What occurs subsequent?

Pseudonymous cryptocurrency merchants say that the market sentiment has clearly shifted within the close to time period.

A dealer generally known as “Pentoshi” stated that the “nice beartinction occasion” is nearing, because the market sentiment turns into bullish as soon as once more. He said:

“Nothing disgusts me extra in life than a grimy filthy bear in a bull market. The nice beartinction occasion is upon us through which they are going to be despatched to everlasting hibernation. The optimistic nature of markets will prevail. Up solely, infinite bid.”

The Bitcoin choices market additionally noticed an enormous expiry, which might alleviate important promoting stress from the market within the close to time period.

Bitcoin, presently ranked #1 by market cap, is up 18.55% over the previous 24 hours. BTC has a market cap of $698.58B with a 24 hour quantity of $112.21B.

Bitcoin Worth Chart

BTCUSD Chart by TradingView

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