Crypto Market Snapshot - July 17, 2018
Today, the cryptocurrency market has seen a sudden spike reminiscent of what happened earlier in the year on April 12. Then, BTC jumped from $6,850 all the way up to $7,750 in the space of about an hour. Today, the resistance at $6,800 that proved too much for Bitcoin in its last two attempts was left in the dust by a spike from $6,750 to about $7,200, where Bitcoin appears to have cooled off (at least temporarily).
We got used to Bitcoin dominance increasing when the cryptocurrency market is performing poorly, but today’s activity is anything but ordinary – this time, BTC dominance increased to 43% as a result of Bitcoin seeing a larger increase than other coins with large market capitalizations. The total cryptocurrency market capitalization is now at $286 billion.
One of the explanations for these extreme surges is a phenomenon called a short squeeze, which can happen to assets that have a high amount of open short positions. If enough traders with open short positions start closing them, this can result in the price of the asset increasing, which leads even more traders to cut their losses and close their short positions. This sets off a domino effect that can result in enormous spikes such as the one we’re seeing today, although there could possibly also be other explanations.
As far as news are concerned, there were no events today that could reasonably be explained as catalysts behind a move of this magnitude.
Plenty of other coins also spiked at a similar time as Bitcoin – Ethereum, for example, is currently trading at $485 and has a realistic shot of breaking the $500 milestone for the first time since June 18.
POWR, the token issued by Australian startup Power Ledger, has been on a roll recently, and it is sitting on top of the top gainers list with an 18.8% increase. Loom Network (LOOM) came close, gaining 16% in the last 24 hours.
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