Bitcoin Surges Over $71K as Ether ETF Hopes Lead to $260M in Short Liquidations

• Renewed hopes for U.S.-listed ether ETFs drive the crypto market higher and liquidate bearish short positions.
• Bloomberg analysts raised the approval odds to 75%, boosting market sentiment.

Bitcoin BTC$89,483.59 surged over $71,000 early Tuesday, its highest since early April, as ether surged over 19% to $3,700 after Bloomberg analysts raised the probability that spot ETH exchange-traded fund (ETF) gets approved in the U.S. to 75%.

Other majors chalked out relatively smaller gains, with XRP, Cardano's ADA, Solana's SOL and DOGE$0.1384 rising between 3-6%, as per CoinGecko data.

The sudden move up caused over $260 million in market-wide short liquidations, the biggest since Feb.28. Ether shorts lost over $115 million, followed by bitcoin shorts at just over $99 million, Coinglass data shows.

Crypto exchange Binance logged over $130 million in liquidations, the largest among counterparts, followed by OKX at $118 million and Huobi at $51 million.

Shorts are bets against higher price movements. Liquidation refers to when an exchange forcefully closes a trader's leveraged position due to a partial or total loss of the trader's initial margin. It happens when a trader is unable to meet the margin requirements for a leveraged position (fails to have sufficient funds to keep the trade open).

Markets started to rally late Monday as Bloomberg analysts Eric Balchunas and James Seyffart raised the odds of a spot ether ETF to 75% from the early 20%. Later, CoinDesk reported that the U.S. Securities and Exchange Commission (SEC) asked aspiring ether exchange-traded fund exchanges to update 19b-4 filings ahead of a key deadline this week.

Market participants consider the approval of an ether ETF to be a bullish event, opening the floodgates to institutional capital. The spot bitcoin ETF, which started trading in January, has racked up $12 billion in total inflows for BTC, with top trading firms and state funds among its holders.

Meanwhile, some traders expect ether prices to rise further in the coming days.

“Our view is that it is unlikely that spot can settle here, with approval taking us closer to 4k and denial back to 3k,” Singapore-based QCP Capital said in a Tuesday broadcast. “Exchanges are being asked to update 19b-4 filings on an accelerated basis, suggesting approval is imminent.”