Was This The Trigger For Bitcoin’s Dump? 3600 BTC Huge Sell-Off Order On BitStamp
Cryptocurrencies today are down by as much as 15% in a crash
that could be fueled by a ‘whale’ selling over 3,600 BTC on Bitstamp. All the major cryptocurrencies are down at the moment, with Stellar (XLM) being the biggest loser with an almost 15% decrease (24 hours). Coin prices started to fall around 2:49 AM (UTC). During this time, BTC price dropped from $7,749 down to $7,179 in less than 30 minutes with Bitcoin’s 24-hour decline being 8.7%. Binance Coin (BNB) was the luckiest, surviving the crash with a drop of less than 6% while Ethereum experienced moderate (7.70%) and Ripple severe (12.44%) losses.
Major BTC dump in the background
At 3:02 AM (UTC), data shows a massive 3,645 BTC sell order on Bitstamp worth $26 million at that time. While there can be more reasons, it is possible that the Bitstamp sell-off triggered massive dumps across all BTC markets as Bitcoin was falling sharply. “This last drop was likely caused by a combination of profit-taking and also algorithmic trading compounding the sudden fall. We can expect these types of steep rises and drops to continue for some time until institutional investors grow market volume,” Kenetic Capital co-founder Jehan Chu said to CNBC.
The BTC long squeeze
Yesterday, CryptoPotato reported that the number of BTC shorts on Bitfinex had decreased significantly by 40% while Bitcoin long positions remained relatively steady (only dropping by 4%). This event created the settings for a long squeeze, which could have commenced by now. A long squeeze can happen when the number of open shorts is low, while open longs are high.
During a long squeeze, the price of an asset suddenly drops inciting further selling. Basically, the same has happened with Bitcoin experiencing a considerable price drop of $600 within less than 30 minutes. While the number of BTC shorts on Bitfinex remained steady since yesterday’s article, BTC longs have started to drop the same time as the coin’s price crash and continued to fall by a total of over 10%, which is a very rare occasion.
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Ben is a crypto journalist and copywriter who has a great passion for blockchain technology. He believes that decentralization empowers people to take charge of their lives, and gives back what we desired for a long time: financial freedom.