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BCH (Bitcoin Cash) Short Sellers Lose Millions in Surprise Price Rally
BCH, the cryptocurrency that emerged from a hard fork of Bitcoin in 2017, has seen a sharp increase in its price in the past few days, catching many short sellers off guard and causing them to lose millions of dollars.
According to data from Bybt, a crypto derivatives platform, the total amount of liquidations on BCH futures contracts across major exchanges reached over $300 million in the last 24 hours, with more than 90% of them being short positions.
The price of BCH surged by more than 50% in the last week, reaching a high of $1,216 on Tuesday, its highest level since May. The rally was driven by several factors, including the upcoming network upgrade on November 15, which will introduce new features and improvements to the protocol, such as faster transactions and lower fees.
Another factor that boosted the demand for BCH was the announcement by BitPay, a leading crypto payment service provider, that it will support BCH as a payment option for Amazon gift cards. This means that BCH holders can now use their coins to shop on the world’s largest e-commerce platform.
The sudden price spike of BCH caught many traders by surprise, especially those who were betting on its decline. Short selling is a strategy that involves borrowing an asset and selling it in the hope of buying it back at a lower price and pocketing the difference.
However, if the price goes up instead of down, the short seller faces a potential loss that can be unlimited.
According to Bybt, the largest single liquidation order happened on Binance, where a trader lost $10.2 million on a BCH short position. Other exchanges, such as Huobi, OKEx and BitMEX, also saw massive liquidations on BCH contracts.
The BCH price rally also had a positive impact on the overall crypto market, as it lifted the sentiment and pushed other coins higher. The total market capitalization of all cryptocurrencies reached over $2.8 trillion on Tuesday, its highest level since May.
BCH is currently the 14th largest cryptocurrency by market cap, with a value of over $21 billion. It is trading at around $1,150 at the time of writing, up by 13% in the last 24 hours.
