Bitcoin fell below US$38,000 after briefly surpassing US$40,000 following Amazon.com Inc.’s denial that its job posting for a digital currency executive meant that it will accept the token for payments this year.

Earlier Monday, the job posting from the retail giant seeking an executive to develop the company’s “digital currency and blockchain strategy” had stirred questions among analysts over whether the move could eventually lead to Amazon accepting Bitcoin as a method of payment. Shortly before 4:00 p.m. in New York, an Amazon spokesperson’s denial that the company will accept the token for payments this year caused its price to plunge to US$37,598. By 4:42 p.m., Bitcoin was trading at US$37,964.

Investors rushing to cover bearish bets had fueled the earlier rally that drove the coin at one point up more than 17 per cent on Monday to US$40,545, its highest since June 15. More than US$950 million of crypto shorts were liquidated on Monday, the most since May 19, according to data from Bybt.com.

“The extent of the jump was probably driven by over-leveraged shorts,” said Vijay Ayyar, head of Asia Pacific at crypto exchange Luno in Singapore.

Meanwhile, Bloomberg News reported a U.S. probe into Tether is homing in on whether executives behind the token committed bank fraud. Ether gained as much as 12 per cent before dropping back to a gain of almost 6 per cent ahead of an upgrade due on Aug. 4 that will reduce the amount of outstanding tokens by destroying some of them every time it’s used to fuel transactions on the world’s most-used blockchain.

The surge on Monday had brought crypto markets back to life after they’d been stuck in the doldrums for months. On Binance, the largest crypto exchange, Bitcoin perpetual contracts jumped as much as 30 per cent over an hour in early New York trading, a sign of extreme volatility in one of the coin’s most liquid derivatives.

There’s been less volatility in Bitcoin since mid-May and the enthusiasm for crypto has dissipated somewhat amid a regulatory crackdown in China and criticism for its toll on the environment.

The Amazon job posting was first reported by CoinDesk last week.

“It is exciting to see Bitcoin rally 10 per cent overnight,” said Loukas Lagoudis, executive director at digital-assets hedge fund ARK36. “However, investors should proceed with caution and avoid overtrading, noting that the liquidity is still relatively low as we are heading into the holiday season.

--With assistance from Justina Lee, Sid Verma and Kenneth Sexton.