Bitcoin, the flagship cryptocurrency, is currently testing the $7,400 mark after falling from a recent high of little over $7,500. The cryptocurrency’s recent surge has liquidated $180 million in short positions, a factor some analysts believe may be behind its rise.

As CryptoGlobe covered, bitcoin’s price soared in a short period yesterday, presumably thanks to a plethora of good news affecting the market. Among them, were Goldman Sachs announcing a more cryptocurrency-friendly chief executive officer, David Solomon.

The world’s largest asset manager BlackRock also revealed it was considering a position in crypto. Reports on BlackRock’s potential move were later on clarified by its chief executive Laurence Fink.

The cryptocurrency saw its price go from $6,800 to over $7,400 in a one-hour period, and is still up by over 10 percent in the last 24-hour period, according to CryptoCompare data.

A prominent theory brought forth by OTC trading firm and liquidity provider Cumberland suggests the price rise was a short squeeze on cryptocurrency exchange BitMEX, which lets traders enter highly leveraged positions on various cryptocurrencies.

According to Cumberland’s calculations “roughly $180,000,000 were liquidated on BitMEX during the 20+ minute period between BTC’s initial spike and when it topped off.” The firm noted that six of the liquidates shorts were of $10,000,000 each.

Presumably, the short squeeze, a move that sees the price of an asset rapidly increase to force short sellers to cover their positions, started the rally, which was then backed by “breakout traders” and cryptocurrency enthusiasts “waiting on the sidelines” after BTC breached the $6,850 resistance.

While it’s unclear whether the short squeeze triggered the surge, it did occur. Twitter bots set to follow the markets showed just how brutal bitcoin’s rise was to short sellers.

Speaking to Bloomberg Ryan Rabaglia, the head trader at cryptocurrency dealing firm Octagon Strategy, revealed he believes the markets have simply been reacting to positive developments. He was quoted as saying:

Markets have been reacting to a number of positive pieces of news, mostly circling around big names such as BlackRock. With any indication of institutional interest in this space comes positive price action, even if it’s unclear in nature. The market just eats it up.

He added that a report created by a Financial Stability Board (FSB) on the work regulators throughout the world have done on cryptocurrencies revealed regulators may “force banks to meet new capital requirements for their holdings of bitcoin and other crypto-assets.”

Per Rabaglia, the FSB also claimed cryptocurrencies don’t currently threaten the financial system, a stance echoed by South Korea’s central bank, the Bank of Korea (BOK), which earlier this month released a report revealing the crypto ecosystem is still small compared to other markets.

Traders’ analysis now suggests the $6,800-$6,850 mark, which was acting as a resistance, is now going to act as a strong support for the flagship cryptocurrency, meaning we might’ve seen Bitcoin trading under $6,000 for the last time.

$BTC Update I) 6800s resistance tested so many times it didn’t bother showing up – cleanly broken II) Next high time frame liquidity: 7760s III) Current obstacle: support turned resistance at 7370s IV) 6800s resistance has become strong support Keep it simple. 🎯 pic.twitter.com/gDpbGcccjz — Cred (@CryptoCred) July 17, 2018

Bitcoin’s rise came shortly after Litecoin creator Charlie Lee stated everyone should own at least 1 BTC before buying altcoins, given the flagship cryptocurrency’s 21 million cap. ADVFN CEO Clem Chambers recently claimed the cryptocurrency could hit $2 million if its “logarithmic growth” continues.