The sudden drop stung BitMEX traders particularly badly, with $157 million in liquidations in a single day
The price of Bitcoin plunged on Wednesday to a monthly low of around $8,700. The sudden drop stung BitMEX traders particularly badly, with the platform reporting $157 million in liquidations in just a single day.
The Bitcoin price performance at the start of 2020 had many analysts bullish. With the rising price, optimism missing from the industry since the summer of 2019 bull run was starting to return.
More recently, things have begun to look a little shakier for Bitcoin. From a yearly high of around $10,400, the leading crypto asset has spent the last two weeks in a clear downtrend.
On Wednesday, the existing downtrend became even more pronounced. In fact, the market shed more than $10 billion over the course of the day.
The sudden plunge in the Bitcoin price appears to have caught many BitMEX traders off guard. The volatility in price has caused the liquidation of around $157 million worth of trades.
As crypto asset market analysis firm Skew points out, this is the highest dollar value of liquidations at the popular derivatives platform all year.
The previous largest day for liquidations in 2020 was on Jan. 20. At the end of Jan. 19, the Bitcoin price dropped by more than $400 in a matter of minutes. That too saw around $150 million suddenly change hands.
According to data taken from CryptoMeter.io, Wednesday saw more than $151.9 million worth of long traders wrecked and just $5.1 million worth of short traders.
The statistic shows a highly optimistic market, which given the hype surrounding the upcoming Bitcoin halving, is hardly surprising. It is not hard to see how a combination of steadily rising prices through 2020 plus talk of Bitcoin at $400,000 from some analysts would lead to so many traders being long.