After remaining stagnant for almost over a month bitcoin saw a huge drop in its price as it went down from $9,500 to $8,000. Even though many analysts had predicted a fall in BTC price, but it was still tough for the crypto community to fathom such a drop.
There could be several factors that might have triggered this drop in the price of leading cryptocurrency. Late on Tuesday, price action triggered a series of liquidation on the BitMex and total of over $600 million in longs were liquidated. This was probably the biggest liquidation of all time on the crypto markets. OKEx also reported that it lost most of its insurance fund in the latest futures liquidation event.
OKex Futures insurance fund loses 85% of its capital to cover the liquidation loses of this mornings move. Unlikely it’ll be able to cover a similar size move in the near future! I wonder how much of Bitmex 250Mil will be hit? #btc #okex #liquidation #bitmex pic.twitter.com/z8OuvRg80n
— michael p (@michael26821035) September 25, 2019
Traders also linked the slump in the price of bitcoin to Bakkt’s launch. An attempt to lower the spot price that might have triggered the continued selling and liquidations. On the first day of Bakkt’s launch, only 72BTC contracts were traded.
Analysts had earlier warned that BTC is following a descending triangle pattern and a massive drop mostly follows it. Now some analysts are saying that the price of bitcoin might even slide down to $4,000 or lower.
Everyone saw this bloodbath coming including Peter, wanted to Bitmex but liquidation Dey fear your guy, USDT was safer.
— Suleiman (@electraguunn) September 24, 2019
Let us know in comments what do you think caused BTC to retract overnight.