Bitcoin Suddenly Drops Below $9K on BitMEX
Indeed! You have read the title correctly. Bitcoin (BTC) experienced a flash crash to $8,900 on BitMEX exchange the previous night i.e. Monday. However, the prices on other exchanges remained well over $60,000.
Flash Crash describes a situation in which the value of an asset drops dramatically and then quickly rises back up. Such price swings have happened previously as well in the Bitcoin market.
What is BitMEX?
If you have witnessed at least one Bitcoin bull cycle in your lifetime, you are surely aware of BitMEX and Arthur Hayes (former CEO of BitMEX). BitMEX facilitates the trading of derivatives and cryptocurrencies. It is based in the Seychelles and is owned and operated by HDR Global Trading Limited. Perpetual, futures, and options contracts are only a few of the cryptocurrency-based financial instruments that you can access at BitMEX.
Bitcoin Flash Crash Was Set Off by Whale Sell-Off
As per experts on social media platform X, the price drop was caused by whale selling. Yes, a big whale sold more than 850 BTC (roughly $55.4 million) on BitMEX. And, this caused the XBT/USDT spot pair to drop below $8,900.
The XBT/USDT pair shows the price of bitcoin in tether.The BitMEX XBT index follows the price of bitcoin. Tether (USDT) is a popular stablecoin.
The decline started at 22:40 UTC. According to data from TradingView, prices dropped below $8,900 within two minutes. To be honest, this is the lowest level since early 2020. But, the prices recovered rapidly & recouped to $67,000 by 22:50 UTC.
The average price of Bitcoin was roughly $67,400 during the boom-bust BitMEX event. According to BitMEX representatives, the incident only happened in the BTC-USDT spot market pair. And, there had been no bearing on the index price of XBT derivatives contracts.
“Investigation has been Launched”, says BitMEX
Following the flash crash, BitMEX took to social media to inform that it is looking into the large sell orders. As soon as they saw suspicious behavior on the BTC-USDT Spot Market, an inquiry was immediately launched. Even while everything was running smoothly, there is evidence that several accounts engaged in aggressive selling that was significantly outside of the norm.