EOS enjoyed a 28% increase in less than 24 hours, as the entire crypto market enjoyed a rare day of profits, with almost every coin barring stablecoins in the green. Occurring on the anniversary of Bitcoin’s all time high, the market gave investors a timely reminder of what it can do, with $10 billion added to the ecosystem in one day. Other notable big winners included Qtum (27%), Ontology (28%), and Dogecoin (21%). Bitcoin itself managed a 9% increase, eradicating the falls of the past week. The rises were welcome relief for holders and traders who had seen prices approach $3,000 in the last week.
Just a Case of Punishing the Shorts?
The jump may simply have been a result of pressure built up by a massive number of traders who had a short contract open on Bitcoin, which has traditionally resulted in a swift pump. This phenomenon is known as a ‘short squeeze’ and occurs when a sharp upward movement forces short sellers to close out their positions, adding to the upward momentum of the asset. As a short squeeze doesn’t reflect any change in the fundamentals of an asset or, usually, pave the way for a change in the overall pattern, the asset usually reverts to the existing trend. This means that there is more chance that Bitcoin will eventually return to its downward trajectory once the run has been exhausted.
Comparing movements to the same day the previous year is usually not relevant, but considering this move occurred on the one year anniversary of Bitcoin’s all-time high it’s interesting to do just that in this case. On December 17, 2017 Bitcoin started the day at around $19,500, peaking at a shade over $20,000 and ending the day around $18,350, representing an overall 24-hour loss of $1,150. So in fact, Bitcoin’s record-breaking day ended with it being 5.9% down while yesterday resulted in Bitcoin being 9% up.
Hey, in this market we’ll take any kind of win we can!