Bitcoin has surged to its highest price in nearly a month, triggering hundreds of millions worth of liquidations as hopes of a deal between the Trump administration and Iran washed the crypto market with positive sentiment.
The crypto market surged to a total value of $2.6 trillion, its highest level for a month, liquidating 177,000 traders of $530 million over the past 24 hours, according to CoinGlass.
The majority of liquidations occurred in the past 12 hours, and 80% of them, or $425 million, were leveraged short positions in Bitcoin (BTC) and Ether (ETH).
The analyst “Bull Theory” posted to X on Monday that over $300 billion in crypto shorts were liquidated over the past few hours, which has added more than $100 billion to the total crypto market capitalization.
Liquidations of leveraged short Bitcoin and Ether positions. Source: CoinGlass.
“This isn’t a breakout. It’s a short squeeze running into overhead supply,” said Valerius Labs. “Real buyers show up above the 200 SMA [simple moving average], not 15% below it.”
Bitcoin tapped a four-week high just below $75,000 on Coinbase in late trading on Tuesday, according to TradingView. It was immediately rejected at heavy resistance there and had retreated to $74,290 at the time of writing.
Ether made a bigger move with a 7.5% daily gain to reach $2,380, its highest level since early February.
Ether tapped a 10-week high on Coinbase. Source: TradingView
The latest move appears to be driven by derivatives, but a broader hope for a deal between the US and Iran to end weeks of conflict that has suppressed global markets could also be spurring investor confidence in riskier assets. Other drivers could include institutional inflows via spot crypto exchange-traded funds and centralized exchanges buying Bitcoin.
Traders hopeful of an Iran deal
Jeff Mei, the chief operating officer at BTSE, told Cointelegraph that markets are rallying largely because “traders believe the US and Iran are coming closer to a deal.”
Iran’s economic lifeline depends on its oil exports, and a US blockade of vital shipping lanes in the Strait of Hormuz could severely damage its economy, Mei said.
“Now, it appears that Iran is frantically looking to broker a deal, and stock and crypto markets are rallying as a response.”
Related: Bitcoin bounces to $72.5K as markets react to US Strait of Hormuz blockade
A US military blockade began on Monday, with President Donald Trump threatening any Iranian ships that approach.
“If any of these ships come anywhere close to our blockade, they will be immediately eliminated, using the same system of kill that we use against the drug dealers on boats at sea,” Trump posted on his Truth Social platform on Monday.
Trump also told reporters that Iran wants to make a deal, but his administration will not come to any agreement that allows Tehran to have a nuclear weapon.
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