[Bitcoin Now] Surges to 44 Million Won Range... Amazon and Twitter Bring Positive Momentum

Interpretation of a Technical Rebound Due to a Short Squeeze Phenomenon

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] The leading cryptocurrency Bitcoin surged to the 44 million KRW range. This is interpreted as being positively influenced by rumors of global IT giant Amazon entering the cryptocurrency market and supportive remarks on cryptocurrency by Jack Dorsey, CEO of Twitter.

According to the domestic cryptocurrency exchange Upbit, as of 2:38 PM on the 26th, Bitcoin recorded 44.56 million KRW, up 8.52% compared to the previous day. Earlier that morning at 10:02 AM, it rose to 45.6 million KRW, setting a new high for the month.

The participation of major IT companies in the cryptocurrency market acted as a positive factor. On the 23rd (local time), according to the US economic media CNBC, Amazon announced through a job posting that “the Amazon Payments team is looking for an expert to establish strategies related to digital currency and blockchain.” Subsequently, Amazon stated in an official release, “We are inspired by the innovations happening in the cryptocurrency field and are researching how to utilize them,” adding, “We will build a future-oriented, fast, and low-cost payment service to provide to consumers.” CNBC interpreted this as Amazon seriously considering entering the cryptocurrency market.

Twitter also actively supported the cryptocurrency market. On the 22nd, CEO Dorsey said during the Q2 earnings announcement, “Cryptocurrencies including Bitcoin will play a significant role in Twitter’s future,” and “Bitcoin could be used in future e-commerce and subscription models.” Earlier, at the Bitcoin conference The B Word held on the 21st, he stated, “Bitcoin is a cross-border payment method,” and “It has the potential to build infrastructure in communities lacking financial services.”

Meanwhile, there was also analysis that Bitcoin’s rebound was due to a short squeeze phenomenon. A short squeeze refers to a technical rebound that occurs when short sellers buy additional stocks to prevent losses caused by rising stock prices. For example, short sellers expecting Bitcoin to fall take short positions, but when the price rises instead, losses occur. To reduce damage, short sellers buy additional Bitcoin, causing the Bitcoin price to rise. On the 25th, the US economic media Yahoo Finance reported, “Bitcoin has been rising for six consecutive days,” adding, “The reason is unclear, but it appears that a short squeeze occurred due to investors who expected Bitcoin to fall.”