A few days ago we explained point blank that both the rising and falling in the cryptocurrencies market were due to speculations and manipulations (elegantly called “inflationary and deflationary mechanisms”) than to media news and the quirks of the regulators.
Today’s spectacular rise in bitcoin and many other currencies in the wake of it shows this truth in an absolutely unprecedented way.
Today, as on any other day, the media have given us the usual bad news on cryptocurrencies, but none of them has managed to stop the rise of bitcoin, which gained more than 1000 dollars in less than an hour.
Because finally the trading platforms have managed to trigger an “inflationary mechanism” (let’s call it this way) of a certain importance:
The image above shows (in the line that rises to the top on the right) the incredible amount of short positions that had been taken by traders on bitcoin.
You can bet that all these positions, in addition to being – because of their own nature – “short” ones, ie. taken through a loan of the platform, were also leveraged, so with much more money put at risk.
After the all time low reached on April 1, the bearish traders had prolonged the position for another 11 days, hoping for that minimum to break.
Unfortunately for them, that did not happen, so they started to skip some of these positions, forced to buy bitcoin at a higher price than they had bet on.
The same thing happened on futures platforms, where short positions were automatically settled without the traders being able to do anything about it.
If this exceptional intraday rise becomes an energy point for a trend reversal, the all time low of April 1st is likely to be remembered as a historical “bear trap”, triggering in the coming days a short squeeze of remarkable proportions (ie. a race to close the short positions or an automatic closing of the same positions).
My personal opinion is that in order to speak of a real long-term reversal of the bearish trend, we’ll have to wait for the bitcoin to rise above 11,000 USD.
However, the purpose of this article is not to announce a change in the trend, but rather to show an inflationary mechanism and its high impact capacity happening live, in spite of external conditions that are completely at odds with it (what with the sour grapes media and general bearish sentiment).
There is no contest: in a market so poorly liquid as the crypto market, these mechanisms are much more effective than one would think.
Today’s short squeeze is an automatic inflationary mechanism due to the way platforms work.
We still do not see the more active and voluntary manipulations, which are much more effective, made by human beings rather than by machines, such as those described in the previous article.
However, when the prices reach such levels as to allow the crypto teams to again have excess funds to use for said manipulations (and when the most important platforms have completed the process of verification by regulatory bodies and are given free reign again), you will see that the whole upward carnival will resume at the same pace as before.
For now, let’s enjoy this sneak peek!
The Team at BlockchainTop News
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