Bitcoin Jumps to a Six-Week High
July 26, 2021
The price of bitcoin jumped to a six-week high Monday, with some investors attributing the rally to short positions being liquidated and speculation that Amazon.com Inc. may be venturing into digital currencies.
… In recent days, speculation grew over Amazon’s possible plans for cryptocurrencies and related technologies, after the company posted a job opening for an expert in digital currency and blockchain.
The online retailing and cloud-services giant said the person, who would be on its payments team in Seattle, would be charged with developing “Amazon’s digital currency and blockchain strategy and product roadmap.” That led to online chatter that the company could one day enable customers to pay in cryptocurrencies. Amazon didn’t immediately respond to a request for comment.
Some $740 million worth of short positions in bitcoin were liquidated Monday, according to data from Bybt, the most of any day in the past three months.
Many cryptocurrency exchanges enable their users to bet on price declines by entering into short positions in their margin-trading accounts. As with stocks, traders do so by borrowing cryptocurrencies such as bitcoin—sometimes with leverage, or borrowed money—and selling them before repurchasing at a lower price to repay their lenders.
Mr. Lee said that when prices jump unexpectedly—especially with cryptocurrencies, where there is a large amount of futures and other derivatives trading—traders with short positions are caught, causing what is known as a short squeeze and leading the price to rise even higher.
www.wsj.com/articles/bitcoin-jumps-20-to-a-six-week-high-11627287544?mod=hp_lead_pos2
