Late Monday evening, Bitcoin BTC/USD experienced a sudden and dramatic drop in value on the BitMEX cryptocurrency exchange, plunging to $8,900 from much higher figures on other platforms.
What Happened: Bitcoin is the apex cryptocurrency, trading over $60,000 on various exchanges. However, within a mere two minutes, as per TradingView’s charts, its value plummeted to its lowest level since early last year.
Following this unexpected tumble, Bitcoin made a swift comeback, climbing to a price of $67,000. While BitMEX saw these drastic fluctuations, the average global price of Bitcoin hovered around $67,400.
Bitcoin’s surge to record levels has shown signs of losing steam. The cryptocurrency, which reached a peak of $73,835 on March 14, saw its value drop by 8.3% by March 19.
This downturn in Bitcoin’s price follows concerns from some investors who feel the market may be becoming excessively buoyant after the approval of spot ETFs.
The fluctuating Bitcoin futures market has further highlighted this sentiment, with a notable liquidation spike. On March 18, long positions worth more than $40 million were liquidated in a signal of heightened volatility. Data from CoinGlass shows that long liquidations surged, amounting to over $15 million, particularly within a four-hour period.
Bitcoin’s trade volumes also diminished, registering a drop of more than $25 billion from the year-to-date high on March 5, which recorded $45 billion in daily transactions.
Crypto asset management firm Grayscale experienced significant withdrawals from its spot Bitcoin ETF, with March 18 marking the fund’s largest day of outflows since transitioning to a spot ETF on January 11. The day saw departures amounting to $642.5 million.
In contrast, the Fidelity Bitcoin ETF, the second-largest fund of its kind, had its inflows dwindle to a mere $5.9 million on the same day, marking its smallest inflows as reported by Farside Investors.
These shifts resulted in a collective net outflow for spot Bitcoin ETFs totaling $154.3 million.
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Why It Matters: In response to the event, BitMEX publicly addressed the situation via social media. The exchange assured its users that while they had noted atypical trading behavior on the BTC-USDT Spot Market, all systems had been functioning normally.
They identified what they described as “aggressive selling behavior involving a very small number of accounts,” which was significantly outside expected market norms.
The exchange’s official statement read, “We launched an investigation as soon as we saw unusual activity on our BTC-USDT Spot Market. All of our systems were operating as normal, but we identified aggressive selling behavior involving a very small number of accounts widely beyond expected market ranges. We can’t comment on any specific behavior of a user or actions taken, and we continue to investigate.”
BitMEX further added, “The trading platform is operating as normal, and all funds are safe.”
Price Action: At the time of writing, the price of Bitcoin was $65,824, down 4% in the last 24 hours, according to Benzinga Pro.
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