Tesla and SpaceX CEO Elon Musk made headlines overnight after updating his Twitter bio to include the Bitcoin hashtag. The endorsement led to a an instant surge in Bitcoin’s price, with the asset jumping from the $32,000 level to over $35,000 over the span of 15 minutes.
Not everyone made money, however. Data from analytics site Bybt shows that the simple change cost 62% of traders hundreds of millions of dollars.
The sharp rise to a 10-day high of $38,020 sparked $387 million-worth of short liquidations on major crypto exchanges including Binance, Bitfinex, BitMEX, ByBit, Deribit, FTX, HuobiDM and OKEx.
Traders who were “short” — those who borrowed capital to bet on falling prices to make profits—were caught on the wrong side. The price surge ended up liquidating their positions, a term for the automatic close of positions when prices hit a predetermined level (usually causing huge losses to traders).
Bitcoin Shorts Liquidated
Nearly $350 million worth of Bitcoin shorts have been liquidated in the last hour. Meanwhile, $120 million in long positions—traders borrowing capital to bet on higher prices—was liquidated as well, likely caused by the price volatility.
Traders on Binance suffered the most. They lost over $103 million in shorts since Musk’s change in bio, with $57 million of that coming in the first ten minutes alone.
The pump changed Bitcoin’s fortunes, which had seen falling prices and bearish sentiment in the past few days. It coincided with a mammoth options expiry for Bitcoin, which some feared could have caused downward pressure.
“Bitcoin surged 14% in 30 minutes,” analyst Joseph Young said. “I think this has to be the biggest 30-minute upsurge in history. And with that, we have a short-term $BTC trend reversal to the upside. – Elon tweet – Options expiry – Robinhood users A perfect storm in hindsight.”
“There were many signs of a bearish trend,” Young continued. “Miners selling, whales depositing, lots of options puts, and continues rejection of $34k. This was reversed today with the mega rally. If Bitcoin reclaims $38k soon, it’s game time.”
At press time, Bitcoin was trading at $37,390, representing a more than 15% gain from the low of $32,000 seen during the European morning session.