Bitcoin up 7.47% as cryptos jump following a steep sell-offwritten by Bella Palmer
The world’s largest crypto currency has risen above $39,000 in the last 24 hours
Crypto currencies jumped on Friday following a steep sell-off a day earlier that saw around $150 billion wiped off the market after Russia invaded Ukraine.
Bitcoin was trading about 7.47% higher at $38,300 at 9:22 am GMT, according to Coindesk data. The world’s largest crypto currency has risen above $39,000 in the last 24 hours. Bitcoin had fallen as low as $34,338.57 on Thursday.
Other digital coins including ether and XRP saw double-digit percentage gains.
Thursday’s sell-off was sparked by Russia’s invasion of Ukraine that also saw global stocks fall sharply. Bitcoin’s price move has more recently correlated closely with other risk assets like stocks, as more institutional investors get involved and short-term investors who trade bitcoin like other risk equities have entered the market.
A stunning intraday reversal in U.S. stocks on Thursday led major indices to close higher. That positive price movement has filtered through to crypto currencies.
But the big crypto currency rebound could also be the result of a so-called short squeeze, according to Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno.
Given, the situation unfolding in Ukraine, market participants generally went short BTC to protect downside risks. This was defensive positioning essentially, Ayyar said. What we’re seeing now is the market unwinding and shorts closing positions.
When investors go short, they are essentially betting on the price of the crypto currency going down.
Traders can short bitcoin by buying a futures contract that bet on a lower price of the crypto currency than where it is trading when they purchase that contract. These usually have an expiry date at which they’re sold.
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