July 26 Cryptocurrency Market Update
July 26 Cryptocurrency Market Update
Date: Jul. 26, 2021, 02:51 PM KST
[Bitcoin Rise]
Based on Upbit, Bitcoin is recording 44.2 million won, up 7.18% from the previous day.
On CoinMarketCap, Ethereum recorded 2.63 million won, up 6.32%. None of the top 10 cryptocurrencies are declining.
London-based newspaper City A.M reported that Amazon is looking to accept Bitcoin payments ‘by the end of the year’, adding that Amazon is also preparing to launch its own cryptocurrency in early 2022. However, the report comes after Amazon posted a notice last week that the “CEO of Digital Assets and Blockchain Products” is not an official position at Amazon.
Andy Jassy, who succeeded Jeff Bezos as Amazon’s CEO, has mentioned blockchain several times in the past but has never expressed an active acceptance of cryptocurrency.
At the Re:Invent conference held by Amazon in 2017, CEO Jassy expressed doubt that blockchain can be used beyond distributed ledger technology.
At the time, Jassy said that Amazon policy is not to use technology just because it’s “cool” but claimed it will be interesting to see what customers will ultimately do using blockchain.
However, Tesla CEO Elon Musk, Twitter CEO Jack Dorsey, and Arc Invest founder Cathie Wood all have spoken in favor of cryptocurrency at the B-Word conference.
[Expert Opinion]
Yahoo Finance reported on the 25th (local time) that the reason Bitcoin surged more than 10% was due to a ‘short squeeze’ after the news that Amazon is pushing for cryptocurrency payments.
A short squeeze is a phenomenon in which a stock price rises sharply as a result of short selling in anticipation of a stock price, but resulting in a loss due to a rise in the stock price.
For example, if the short (sell) forces placed a short position and the stock price rises, they must buy and fill the stock to reduce losses. This is called short covering, and when short coverings are crowded, a ‘short squeeze’ occurs.
As the stock price rises, the short squeeze phenomenon accelerates, causing short sellers to collect more shares. In the process, the stock price rises even more rapidly.
The reason why the short squeeze occurred on this day is because the price of Bitcoin has risen significantly contrary to expectations, such as the recent rise in Bitcoin for 6 days in a row.
According to Bloomberg News, Bitcoin has broken the 50-day moving average for the first time since May 12, suggesting that further gains are likely. Bloomberg predicts that for the time being, Bitcoin will trade between $35,000 and $40,000.
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