Bitcoin traders are betting the cryptocurrency has further to run in August following a dramatic short squeeze, although prediction markets suggest there is little expectation of a return to six figures this month.
Bitcoin surged nearly 8% on Wednesday to around $69,500, its strongest level since early June and its biggest one-day gain since March.
The move triggered more than $1 billion of short-position liquidations in roughly an hour, forcing traders betting on further declines to buy back positions as prices accelerated higher.
Prediction market Polymarket subsequently put the probability of Bitcoin reaching $72,500 during August at 46%, a jump of 29 percentage points on the day. The odds of touching $67,500 increased to 59%.
Expectations fall rapidly beyond those levels. Traders assigned a 21% probability to $75,000, 10% to $77,500 and just 5% to $80,000. The chance of Bitcoin reaching $100,000 was only 1%.
The rally was supported by more than forced short covering. Large Bitcoin holders have reportedly accumulated around $2.9 billion of the cryptocurrency over the past 60 days, while improving sentiment around US financial conditions provided another tailwind.
However, technical resistance remains. Bitcoin was still below its 200-day moving average near $69,900, meaning the latest surge has yet to establish a convincing longer-term trend reversal.
