According to data by TradingView, on crypto exchange Bitstamp, around 10:33 UTC on Saturday (March 13), the Bitcoin price reached an intraday high of $59,755, in the process recording a new all-time high.
Rafael Schultze-Kraft, CTO at on-chain market intelligence startup Glassnode, said that more than $100m in short positions had been liquidated as the result of a short squeeze:
$100m+ short liquidations within 10 minutes.
Don't 👏 bet 👏 against 👏 #Bitcoin 👏
— Rafael Schultze-Kraft (@n3ocortex) March 13, 2021
Here is Binance academy describing the anatomy of a short squeeze:
“A short squeeze happens when the price of an asset sharply increases due to a lot of short sellers being forced out of their positions.
“Short sellers are betting that the price of an asset will decline. If the price rises instead, short positions start to amass an unrealized loss. As the price goes up, short sellers may be forced to close their positions. This can occur via stop-loss triggers, liquidations (for margin and futures contracts). It can also happen simply because traders manually close their positions to avoid even greater losses.
“So, how do short sellers close their positions? They buy. This is why a short squeeze results in a sharp price spike. As short sellers close their positions, a cascading effect of buy orders adds more fuel to the fire. As such, a short squeeze is typically accompanied by an equivalent spike in trading volume.“
Ki Young Ju, the CEO of South Korean blockchain analytics startup CryptoQuant, thinks today’s surge in the price of Bitcoin “came from stablecoin buying power.” The large negative gap between the Bitcoin price on Coinbase and on Binance suggests that there was huge buying pressure from Binance.