Bitcoin prices rose higher than $39,000 Sunday for the first since June 16 in an apparent short squeeze driven by people who had bet that bitcoin would go lower and then had to quickly sell to cover their positions.
Bloomberg credited speculation over a crypto-related Amazon recruitment ad with the surge in the bitcoin price. The e-commerce giant said it is seeking an executive to develop the “digital currency and blockchain strategy.” Analysts discussed whether the move means Amazon will start accepting Bitcoin as payment.
“For the first time in many weeks we are seeing bullish signs here and expect Bitcoin to head towards the upper end of the $30,000-$40,000 range,” Pankaj Balani, CEO of Delta Exchange, told CoinDesk.
Prices have been rallying since Wednesday, July 21 with Sunday showing the largest daily gain in six weeks. Bitcoin was down slightly as of this writing, trading at $38,297.32.
“A short squeeze setup,” bitcoin analyst Willy Woo tweeted Friday @woonomic. On Sunday, Woo was back with confirmation: “And folks, we have our squeeze.”
Bitcoin options traders are pricing an 8-percent chance of the cryptocurrency rising to a new high above $64,800 by Dec. 31, according to data source Skew.
“If BTC retains the lower range of 30K, shorts will begin to squeeze as BTC moves to the middle point of the range, likely accelerating in the coming days/weeks,” Sashimi Nakamoto wrote on CryptoQuant.
As the No. 1 cryptocurrency share price rose on Amazon-payments speculation, investors rushed to cover bearish bets, fuelling the rally, Bloomberg reported. Bitcoin was up as much as 15 percent to $39,681 on Monday. More than $950 million of crypto shorts were liquidated on Monday, the most since May 19, according to data from Bybt.com.
“The extent of the jump was probably driven by over-leveraged shorts,” said Vijay Ayyar, head of Asia Pacific at crypto exchange Luno in Singapore. Amazon rumors probably played a role too, he added.
An anonymous Amazon source told London business newspaper City A.M. that the company plans to start accepting bitcoin as payment by the end of 2021. This could help push bitcoin crypto transactions into broader mainstream acceptance.
“This isn’t just going through the motions to set up cryptocurrency payment solutions at some point in the future — this is a full-on, well-discussed, integral part of the future mechanism of how Amazon will work,” the source told City A.M., according to a report published on Sunday.
The job opening at Amazon “is the key first stage of this crypto project, and the directive is coming from the very top… Jeff Bezos himself,” she said.
The Amazon insider said the company doesn’t plan to stop with bitcoin. Once it establishes a safe and speedy bitcoin payment process, “ethereum, cardano and bitcoin cash will be next in line before they bring about eight of the most popular cryptocurrencies online,” she added.
Amazon has been working on enabling crypto payments since 2019, the source said. “It won’t take long because the plans are already there … This entire project is pretty much ready to roll.” And when Amazon has all its crypto ducks in a row, “there’s another twist to push things even further into Amazon’s favor – a native token,” the insider told City A.M.
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?