The prices of bitcoin and several leading altcoins have spiked over the past few days following an announcement from Jerome Powell – the chairman of the Federal Reserve – that the United States has no intention of banning crypto use.
Bitcoin Is Doing Better Now That America Gives the Greenlight
Several traders throughout America are likely breathing a heavy sigh of relief given that China has worked heavily to remove bitcoin from its turf, first by banning all miners and then by declaring cryptocurrency transactions and related activities illegal. Many were concerned that America would take a similar turn, though it appears this will not be the case.
Following this announcement, bitcoin shot up by approximately six percent, rising from roughly $44,000 to about $47,000 per unit, though not everyone believes Powell’s words had anything to do with the crypto surge. Some claim that this is all part of a short squeeze, though regardless, the fact remains that bitcoin is trading higher than it’s been for a while.
Daniel Joe – a self-described crypto analyst and author – mentioned the following on his Twitter page:
539 #BTC shorts liquidated in one minute sending #bitcoin to 47K.
Of course, this news was contradicted by other analysts on social media who felt that a short squeeze wasn’t fully responsible for the rise bitcoin was experiencing. Julius de Kempenaer – a senior technical analyst at StockCharts.com – mentioned in a post:
With regard to the current rapid rise of BTC, it could be a short squeeze, but it’s hard to say for sure. At the end of the day, it does not matter too much where the demand came from. There was/ is strong buying activity, and that is pushing the price higher.
Marc Bernegger – a board member with the Crypto Finance Group – posted entirely different reasoning to his account page, claiming:
The short squeeze was just partly responsible for today’s price move and the main reason behind it was Federal Reserve Chairman Jerome Powell saying the U.S. didn’t have plans to ban cryptocurrencies.
So Much Happening at Once
Brett Sifling – an investment advisor with Gerber Kawasaki Wealth & Investment Management – also said he doesn’t think a short squeeze has much to do with the recent price rise:
I don’t know what a short float looks like on bitcoin, but I can’t imagine that it made a material impact on the rally. I believe the rally is due to Jerome Powell and Gary Gensler having positive comments yesterday. Jerome suggested that the central bank would not ban crypto like China did. Gary mentioned support for a bitcoin futures-based ETF. These comments, along with the mess of debt ceiling/ government shutdown/ infrastructure bill/ inflation worries in the U.S, are setting up during a seasonably favorable period for BTC.
Charlie Silver – CEO & chairman of Permission.io – claimed that crypto was a “response to the irresponsible fiat currency management we are all seeing on display.”