Since last week crypto community celebrates the return of Bitcoin to the green with an inspiring bounce up to $1000 in value in less than an hour of trade[1] on Thursday, 12 April.
The sudden increase in Bitcoin’s value was met with much fanfare and further speculation as to what caused the massive volume in trade in the preeminent cryptocurrency.
There are a number of reasons for Bitcoin’s sudden surge in price and they have seemingly worked in tandem to boost the virtual currency’s value. While the exchange rate of Bitcoin stands at around $8,157 after the weekend (at the press time), it’s about time to sum up all the factors.
Short squeeze
Forbes financial analyst Charles Hayter suggested[2] that the spike was due to what is known as a ‘short squeeze’ on the Bitfinex exchange[3].
In layman's terms, a short squeeze[4] is caused by a turnaround in a stock’s price which forces short sellers to close their positions which in turn forces the price of a stock even higher.
Bitcoin has endured a bearish streak[5] since it’s all time high of $20,000 in December[6]. However, as tensions have eased somewhat, short sellers were hard pressed to close their positions to prevent further losses as Bitcoin began to rally on Thursday.
As a result, Bitcoin enjoyed a record high in daily trading volume[7], as well as a record for the most volume traded in a single hour as noted by Twitter users.
That was the biggest 1 hour volume candle in #bitcoin history. Over 38.5K $BTC traded ( ~270 million dollars ) 😲👇 pic.twitter.com/HfvQTmRKBA
