Bitcoin rebounds above $62,000, marking a significant recovery after a tumultuous week for financial markets, fueled by the S&P 500 and Nasdaq 100’s best performance since November 2022.
Context of the rebound
The Bitcoin rebound comes amid a broader market recovery led by the US stock markets. On Thursday, the S&P 500 recorded its best performance since November 2022, with a 3.1% rise in the technology-focused Nasdaq 100. This recovery helped offset losses earlier in the week when both stock indices and cryptocurrencies experienced a sharp drop.
The rise of Bitcoin also had a domino effect on other major cryptos. Ethereum and Toncoin each surged by 10%, while Solana saw a 5% increase.
Impact of liquidations and market sentiment
The sudden rise in Bitcoin, with an increase of nearly 8% in just 24 hours, is partly attributed to the massive liquidation of short positions on BTC-backed futures. Around $100 million of these bearish bets were liquidated, marking the fourth largest such liquidation for the current year. This ‘short squeeze’ phenomenon has contributed to fueling the price surge as traders were forced to buy back their positions.
The US presidential election could play a crucial role in Bitcoin‘s trajectory. Donald Trump, positioning himself as pro-crypto, has recently lost ground to Democratic candidate Kamala Harris.
