Saturday, January 16, 2021

Bakkt launch, BitMex liquidations and other reasons that triggered BTC crash

The Takeaway:

BTC broke the descending triangle pattern after it briefly dropped down to $8,000. This overnight fall in the price of bitcoin left many shocked. On Tuesday, more than $600 million longs were liquidated on BitMex. Some analysts are predicting that BTC might slide down further.

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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. 

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. 

Let us know in comments what do you think caused BTC to retract overnight. 

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Disclaimer: The article reflects the opinions of the author and is not representative of Chaintimes’ views.
The article does not offer any investment advice. User discretion is advised when investing in or trading with cryptocurrency. Extensive and diligent research should be carried out by the reader before making a decision.

Dorsey Gray
Dorsey Gray
Dorsey works in the oil and energy industry since he graduated as a mechanical engineer from Bagdad Senior High School. However, he loves to explore and write about the financial world while he sits in the balcony of his beachside room. Dorsey also loves to cook, but just for himself.

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