Bitcoin leads crypto rally, climbs above $30,000, with possible boost from short squeeze
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Bitcoin topped $30,000 for the first time since June, hitting its highest level in 10 months, as open interest on the CME exchange rose after a holiday weekend.
The biggest cryptocurrency was up 4% at $30,264 as of 3:13 p.m. in New York on Tuesday after jumping nearly as much on Monday, according to Messari.
The latest move appears to have been caused by CME derivatives traders’ bitcoin exposure after an Easter break, according to crypto analysis provider K33 Research. “Increased activity on the CME before and during yesterday’s initial peak towards $29,000 suggests that CME traders were behind the initial advance.” Binance traders “reluctantly” followed above $30,000 in a possible short squeeze, the firm’s analysts wrote in a research report on Tuesday.
The token has weathered the recent banking turmoil well, rising over 44% since the March 10 collapse of Silicon Valley Bank.
Ether, the No. 2 cryptocurrency, rose 1% to $1,906. Investors are bracing for potential selling pressure as the Shanghai (Shapella) upgrade to the Ethereum blockchain, scheduled to go live on Wednesday, will allow some participants to withdraw funds that have been frozen for months as part of the network’s migration to proof-of-stake rather than proof-of-work validation technology.
Wednesday will also see the release of the US core consumer price index and minutes from the Federal Reserve’s meeting on 21-22. March, which could affect the investor outlook for interest rate developments, and potentially affect crypto trading.
The crypto market cap rose 2.7% on a 24-hour basis to $1.26 trillion. Among the leaders is Solana’s Sun, up 14%. The rapid increase may point to excitement surrounding the release of Saga, an Android smartphone with special Solana blockchain integrations, scheduled for April 13.
Xrp, which gained nearly 40% in the past month and outperformed other cryptocurrencies, added a modest 1.08% and is now trading at 52 cents. According to an analysis from the data provider Kaiko, the rally was primarily driven by retail investors. Traders can position themselves for a victory by Ripple, a company closely linked to the token, in its multi-year legal battle against the US Securities and Exchange Commission, which accuses it of selling xrp as an unregistered security.
Crypto stocks are also on the rise. Shares of miners Marathon Digital Holdings, Riot Platforms, Hut 8 Mining are up 28.8%, 33.7% and 17.3% respectively since Thursday’s close.
Major bitcoin buyer MicroStrategy’s shares jumped 6% on Tuesday. The software vendor has recently purchased around 1,045 bitcoins for approximately $29.3 million, bringing its total to 140,000, purchased at an average price of $29,803 per coin. As the leading cryptocurrency rose above $30,000, the company’s $4 billion bitcoin holdings returned to profitability.
