Bitcoin (BTC) experienced a sudden drop to $8,900 on BitMEX, deviating significantly from its stable $60,000+ valuation on other exchanges.
What is a Bitcoin flash crash?
On a late Monday, Bitcoin experienced a swift downturn, dropping to a low of $8,900 on the cryptocurrency exchange BitMEX, a stark contrast to its stability above $60,000 on other platforms. This is known as a flash crash.
A sharp decline started at 22:40 UTC that within two minutes led Bitcoin’s price down to $8,900, marking its lowest point since the beginning of 2020. However, the recovery was just as rapid, with the price surging back to $67,000 by 22:50 UTC.
During this rapid rise and fall on BitMEX’s spot market, the global average price of BTC hovered around $67,400. Speculation arose on the social media platform X, with some users suggesting that massive sell-offs by large holders, or ‘whales’ triggered the price drop.
User @syq pointed out that an individual had sold more than 850 BTC (valued at approximately $55.49 million) on BitMEX, causing the XBT/USDT spot pair to dive to $8,900.
The XBT index on BitMEX monitors the price of Bitcoin, whereas the XBT/USDT pair indicates the price of Bitcoin in terms of Tether (USDT), the leading stablecoin pegged to the US dollar. Despite the turbulence in the spot market, BitMEX’s derivatives markets, worth billions, remained unaffected.
In response to the incident, BitMEX announced via social media that it had initiated an investigation into the large sell orders. Furthermore, BitMEX reassured its users, stating, “The trading platform is fully functional, and all user funds are secure.”
As mentioned earlier today already – we are investigating unusual activity on our BTC-USDT Spot Market.
This did not affect any of our derivative markets, nor the index price for our popular XBT derivatives contracts.
The trading platform is operating as normal and all funds…
— BitMEX (@BitMEX) March 19, 2024
The development follows Bitcoin reaching new all-time highs of almost $74,000 on Mar. 15, before then dropping to $66,885 on Mar. 15. The world’s first cryptocurrency’s price started skyrocketing following the approval of Bitcoin spot exchange-traded fund (ETFs) contracts back in January.
The newly-approved ETF contracts have attracted significant attention from market participants, reaching daily net inflows in excess of $1 billion for the first time on Mar. 12.
Featured image: ideogram
