Overnight, the price of Bitcoin (BTC) fell by an impressive 87% on BitMEX, temporarily dropping to $8,900. As the exchange investigates, what caused such a move?
Bitcoin (BTC) at $8,900: BitMEX investigates
After a strong start to the year, the cryptocurrency market has been facing a logical correction in recent days, allowing it to catch its breath. But last night, the price of Bitcoin (BTC) encountered some very peculiar turbulence on BitMEX, rising temporarily to $8,900 per unit overnight:
I’m guessing that they’re done (for now?) Total volume so far is just shy of 1,000 BTC over 3.5 hours with a low of $8,900. pic.twitter.com/hdVmYM1YkI
– syq (@syq) March 18, 2024
As the previous tread shows, this market shift appears to be due to a succession of massive sales for a total of 1,000 bitcoins in 3.5 hours on the platform.
The price action lasted just a few minutes, with prices first touching $38,000 before making a new low to return to normal within the hour.
In reality, this crack was only localized to the exchange, as the asset was trading at $65,620 at the time of writing:
BTC price in 4-hour data
For its part, BitMEX has temporarily blocked withdrawals from some of the addresses involved in these price movements and is currently conducting an investigation to try and understand the ins and outs of this affair:
“We are investigating unusual activity over the last few hours involving a user selling large orders on our BTC-USDT spot market. This does not affect any of our derivative markets or the index price of our popular XBT derivative contracts. The trading platform is functioning normally and all funds are safe. “
While such a move is impressive, corresponding to a fall of almost 87%, it’s not the first time such a flash crash has occurred locally. This provides lucrative arbitrage opportunities for careful traders, who can buy the asset at a significant discount and sell it elsewhere at a higher price, thereby mechanically rebalancing the market.
