'Uptober' Starts Early as Bitcoin Price Pump Smashes Short Positions

Bitcoin has jumped in price following the Federal Reserve's decision yesterday to cut interest rates—and traders who shorted the are being wiped out in a growing wave of liquidations.

The biggest digital coin's price is now sitting at $63,199 per coin after jumping more than 6% in 24 hours, CoinGecko shows.

In the past day, over $154 million in short positions have been liquidated across all cryptocurrencies, CoinGlass data shows. Of that figure, nearly $74 million were Bitcoin positions.

Short positions are held by traders who bet the price of an asset going down in the future. If a short is liquidated, then the trader has lost the bet and their position is closed.

The rest of the crypto market is also up significantly. Ethereum's price currently stands at $2,437 per coin after rising over 6% in the past 24 hours. More than $33 million in positions shorting the asset's price have been closed.

The Federal Reserve slashed interest rates by 50 basis points on Wednesday after hiking them to a 23-year high back in 2022. Bitcoin and other cryptocurrencies, along with crypto and tech stocks, have since been rising as a result. Riskier investments such as digital assets and U.S. equities tend to do better in a low interest rate environment.

Bitcoin hit an all-time high of $73,737 in March thanks to the historic approval of exchange-traded funds (ETFs) giving traditional investors exposure to the coin. But it has since struggled to hit that point again.

Stocks typically do badly in September, data shows, and Bitcoin has broadly followed that trend—it's the worst month on average for the asset over the past 11 years. But October and November historically are boom months for Bitcoin, and the so-called Uptober swing might be starting early due to the Fed.

Edited by Andrew Hayward