NAIROBI (Coinchapter.com) – Bitcoin experienced a dramatic flash crash on the BitMEX exchange, plummeting to a low of $8,900. Despite the sudden decline, prices across other major exchanges remained relatively stable. This incident underscores the potential for volatility within cryptocurrency markets.
The crash occurred on Monday at 22:40 UTC, with prices rebounding rapidly by 22:50 UTC. While the brief plunge shocked some traders, Bitcoin’s global average price remained largely unaffected, hovering around $67,400.
What Caused the BitMEX Flash Crash?
Social media, particularly users on platform X, engaged in lively speculation over the crash’s cause. A notable discussion by a user, @syq, revealed that an individual had sold over 400 BTC in several transactions ranging between 10 to 50 BTC on the XBTUSDT pair on BitMEX. This action resulted in more than 30% slippage, presumably costing the seller over $4 million in losses. This sell-off is believed to be a primary factor contributing to the dramatic drop in the XBT/USDT spot pair price.
In the wake of the crash, BitMEX issued a statement acknowledging the unusual trading activity on its platform.
“We are investigating unusual activity in the past few hours involving a user selling large orders on our BTC-USDT Spot Market. This does not affect any of our derivative markets, nor the index price for our popular XBT derivatives contracts.”
The exchange vehemently denied any technical issues on their platform, stating systems were “operating as normal and all funds are safe.” However, the abrupt $58,000+ price discrepancy between BitMEX and other major bitcoin exchanges like Coinbase and Binance raised serious questions about market integrity.
Currently, Bitcoin trades at $65,455.26, marking a 2.51% decrease over the last 24 hours. This downturn follows a more dramatic plunge, where Bitcoin’s value dropped more than 6% in the immediate aftermath of the flash crash. Despite a subsequent price recovery, Bitcoin’s valuation remains 2.5% lower than its previous 24-hour high.
Bitcoin (BTC/USD) is trading below the critical 50-day moving average, signaling caution among traders regarding short-term momentum. Furthermore, the Relative Strength Index (RSI) stands at 45, suggesting a neutral market sentiment. However, this neutrality could also indicate a potential turning point for Bitcoin.
