Bitcoin price approaches 4200, traders are generally bullish

On Thursday night, the price of Bitcoin saw another wave of increases, rising by more than 2% and reaching a peak of nearly $630.

However, there haven’t been any major news catalysts emerging in the market, and Bitcoin trading volumes have risen over the past few trading days, but remain generally low.

Given this tepid market dynamic, Petar Zivkovski, director of operations at Bitcoin leveraged trading platform Whaleclub, told reporters that a “short squeeze” could easily drive up Bitcoin prices. At press time, the highest point of the day was $628.75.

The rise in the price of the coin comes six days after the platform’s long position ratio reached 87%, according to data from Whaleclub. Earlier this week, Bitcoin surged by more than $600, and three consecutive trading days of gains have also pushed traders’ long positions above 80%.

The figure of $600 also represents a key psychological barrier. On August 2, 120,000 BTC of Bitcoin was hacked away due to a security vulnerability in Bitfinex, and the price of Bitcoin once fell to $3,000.

Speculators dominate

Zivkovski isn’t the only market observer to point out that speculators play a key role in bitcoin trading.

Jacob Eliosoff, a cryptocurrency investment fund manager, also said that there are more speculators in the digital currency market and fewer real users, which is "unhealthy."

“Most traders are just looking to make a profit from trading,” he told CoinDesk. “If the user base of bitcoin continues to grow, I expect we’ll see more stability in the price of bitcoin.”

Zivkovski also said that Bitcoin’s move above $600 could signal a continuation of its rally in the short term.

“After breaking through $600, the price of the currency has started a steady upward trend without any pullback, and has reached new highs since then,” he told reporters. “This is a bullish sign and may indicate that new funds are flowing into the trading market.”

However, Zivkovski also noted that Bitcoin’s price is currently facing significant resistance and that it will take “a lot of firepower” to move above $640, he said.

In addition, he also pointed out that the price of Bitcoin may also fall back, possibly falling to $600.