Cryptocurrencies climb as market watchers cite short sovering

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Bitcoin jumped more than 5 percent in the span of a few minutes on Wednesday, pacing a rally in cryptocurrencies as market watchers cited potential short covering for the move.

The surge from around $6,465 to $6,840 began at 9 a.m. Hong Kong time and took about seven minutes, according to composite pricing on Bloomberg. The cryptocurrency was trading around $6,710 at 11:03 a.m., near a two-week high. It’s still down 53 percent this year.

The number of short positions in Bitcoin on Bitfinex, one of the world’s largest virtual currency exchanges, has climbed near an all-time high, said Timothy Tam, chief executive officer of CoinFi, a cryptocurrency data analysis company.

“When there’s a record number of shorts, if there’s a large explosive price movement up like this, it means people will need to cover their shorts quite quickly,” Tam said in a phone interview. “It’s almost like a domino effect.” — Bloomberg