After slumping 7.6 percent in September over China‘s cryptocurrency ban and growing regulatory pressure in the U.S., Bitcoin jumped 10 percent in a matter of minutes on Oct. 1 to $47,884 in New York trading.
For short-sellers betting that Bitcoin’s price would decline, you could call it “Shocktober.”
A classic “short squeeze” liquidated more than $270 million worth of crypto positions in less than hour, according to liquidation data from Bybt. Lex Moskovski of Moskovski Capital tweeted, “say hi to uptober.”
Popular on-chain analyst Will Clemente tweeted, “Say hello to supply shocktober”. Clemente predicted last week that Bitcoin bears could be in for a surprise, telling his 273,000 Twitter followers that he believes the value of the No. 1 crypto would be much higher in 30 days.
Major altcoins also saw gains, some jumping more than 10 percent in 24 hours. Ethereum (ETH) gained 9 percent, Cardano (ADA) gained 7 percent, Dogecoin (DOGE) gained 8 percent and Solana (SOL) gained 13.56 percent.
In its rally to $47,000, Bitcoin busted through through two key technical resistance levels — the 50-day and 200-day moving averages — statistics that capture the average change in a data series over time. However, Bitcoin still faces short-term resistance near $53,000, representing a potential upside of 11 percent, Business Insider reported.
If Bitcoin can “decisively” hold on to its gain until Saturday, it could signal a long-term uptrend and target its next resistance level near $52,900, according to Katie Stockton, technical analyst of Fairlead Strategies. Earlier this week, Stockton said that Bitcoin’s long-term uptrend is intact despite negative short-term momentum in recent weeks when Bitcoin fell below its moving averages.
Moving averages are usually calculated to identify the trend direction of a stock or to determine its support and resistance levels. Moving averages are a trend-following—or lagging—indicator because they are based on past prices, according to Investopedia.
Antoni Trenchev, managing partner and co-founder of Nexo, a crypto lender, said he was encouraged that Bitcoin moved so quickly above its 20, 50 and 200-day moving averages. But he urged caution, Bloomberg reported. “Sudden accelerating price action can hastily unwind,” Trenchev said.
Federal Reserve Chairman Jerome Powell said Thursday in a Congressional hearing that the central bank had “no intention” of banning cryptocurrencies. This is being credited as one reason for Bitcoin’s sudden Oct. 1 gain.
Listen to GHOGH with Jamarlin Martin | Episode 74: Jamarlin Martin Jamarlin returns for a new season of the GHOGH podcast to discuss Bitcoin, bubbles, and Biden. He talks about the risk factors for Bitcoin as an investment asset including origin risk, speculative market structure, regulatory, and environment. Are broader financial markets in a massive speculative bubble?