Today bitcoin went down by 10% while $200 million worth of bitcoin got liquidated on Bitmex.
Bitcoin plunged by over $700 in a short time as it dropped from $8,000 to hit a low of $7,280 today during a rough hour sell-off. It has bounced back after to $7,450. The price drop started only minutes before Facebook CEO Mark Zuckerberg’s hearing at the Congress about Libra, Facebook’s coin.
After the ATH in July for bitcoin, this is the second violent drop. The first was on 23 September when the price dropped from $10,000 to under $8,000 which coincided with the launch of Bakkt and the expiring of CME futures contracts. Now the actual drop which is smaller than the precedent one sent bitcoin down by 45% from the ATH this year.
The present crash took by surprise many longs on Bitmex liquidating around $200 million worth of bitcoin during the sell-off. The price first dropped on Bitmex in 5 minutes then it took 30 minutes to spread on the other exchanges.
This lead to many analysts accusing BitMEX to have caused the drop. Bitmex is a derivative trading platform where users trade with high leverage and the violent moves in bitcoin prices often liquidate a large number of users.
What caused the drop? what causes every big price movement? MEX
At this point, I think it’s safe to say BitMEX is the biggest factor in the short term trend of the price of major cryptocurrencies.
Imagine if there was an ETF disapproved or smth and that is framed as the reason. https://t.co/Jiw1IAOEWc
— Joseph Young (@iamjosephyoung) October 23, 2019
While bitcoin price dropped violently Bakkt seems that got traction hitting a new record in volume by 296 BTC ($2.2 million) trading volume in one day.
The Greed and fear indicator today is at 33% down by 6% compared to yesterday, however, this tool updates in +11 hours from now and it will be interesting to see the sentiment after the update.