All articles tagged with #short covering
Bitcoin climbed to about $95,500, its highest in two months, as December CPI held at 2.7% year over year with modest monthly gains. The advance was aided by aggressive short-covering, with roughly $587 million in crypto shorts liquidated (about $292 million tied to BTC). As earnings season begins and macro cues stay supportive, risk assets, including crypto, held firm above the key level.
Opendoor Technologies' shares surged dramatically due to retail traders and meme stock enthusiasm, with the stock rising over 590% in July, fueled by social media hype, high trading volumes, and short covering, marking a notable rally in the real estate tech sector.
Bitcoin's recent surge above $117,500 was driven mainly by short-covering in derivatives, leading to over $1 billion in liquidations and a drop in open interest, indicating that the rally may be fragile without new inflows. Analysts suggest that the current momentum is fueled more by derivatives activity than spot demand, and caution that the rally's sustainability depends on future market inflows. The weakening US dollar and signs of economic slowdown support Bitcoin's bullish outlook, but traders remain cautious about the rally's durability.
Oil prices have slumped to their weakest level since late June, with front-month prices and calendar spreads retreating sharply since the end of September. Some attribute the collapse to rising interest rates and a worsening global economic outlook, while others point to the limited changes in production and consumption. The drop in prices and spreads may be attributed to a short-covering rally and a squeeze on deliverable supplies that has since unwound. The market has returned to a more neutral state, with production restraint by Saudi Arabia and its OPEC⁺ partners being offset by continued growth in non-OPEC output and a downgraded outlook for global growth.
Hedge funds have been de-risking in July at levels close to record levels for the past decade, with short covering being the main driver. Long/short hedge funds experienced a nine-day streak of negative returns, the longest since January 2017, and are expected to face the worst monthly alpha drawdown since May 2022. Goldman Sachs' prime brokerage report indicates signs of capitulation emerging. Meanwhile, US stocks show modestly positive levels, with Adobe experiencing significant gains and Apple and Amazon preparing to report earnings.
Sirius XM Holdings stock experienced a sudden surge of 42% due to a combination of factors including short covering, the unwinding of a spread trade involving Liberty SiriusXM, and potential buying related to the rebalancing of the Nasdaq 100 index.
Gold and silver prices rebounded due to bargain hunting and short covering after hitting multi-week lows. The weaker US dollar index and a dip in US Treasury yields also supported the metals market. The US lawmakers are moving closer to a deal to raise the US government's debt limit, which has boosted trader and investor attitudes. The silver bears have the overall near-term technical advantage, while the gold futures bulls have the overall near-term technical advantage.
Gold prices surged due to short covering by shorter-term futures traders and Federal Reserve Chairman Jerome Powell's remarks that interest rates may not need to rise as much to meet the Fed's policy goals. However, Powell also stated that the FOMC is committed to returning to the 2% annual US inflation goal. The sell-off in the US dollar index also supported the precious metals market bulls. June gold rose $16.90 to $1,976.70.