Bitfinex’s $670M Ethereum (ETH) liquidations were a bug, says CTO, while the token drops below $1.8K

YEREVAN (CoinChapter.com) – Paolo Ardoino, the chief technical officer at crypto exchange Bitfinex, posted a Twitter thread on June 7, calling out the Ethereum (ETH) liquidations as misreporting from data aggregators. In detail, as CoinChapter reported on Monday, one of such aggregators, CryptoQuant, detected a three-year record for ETH in single-day short liquidations.

Bitfinex didn’t liquidate $670M ETH?

Traders allegedly liquidated $698 million, while over $670 million in short positions was liquidated from Bitfinex alone. However, Ardoino dispelled the rumors, calling the incident an RTFM (read the f*****g manual) misunderstanding.

Also read: Ethereum (ETH) bearish despite undergoing $700M short liquidations — here’s why?

Bitfinex API confusion

The CTO referred to the difference between Bitfinex’s API and other exchanges.

While competitors provide just trade executions, Finex reports actual positions (with their internal position id, size and base price) and streams updates while the position gets liquidated through the market.

further detailed the executive.

He also added that Data aggregators have been using the “amount” fields as execution size. So when Finex was updating the new position size via WebSockets, data aggregators kept accruing the amounts. Hence the confusion. The executive also noted that the right approach would be to keep track of the position ID and “consider the first message (with a specific position id)” as the total liquidation size.

Also read: Ethereum (ETH) price rallies but experts are not convinced.

While the misunderstanding confused not only aggregators but traders using them, the Ethereum token dropped 5% in price. As a result, the ETH/USD exchange rate stood at $1,780 ahead of the New York session Tuesday.

Ethereum on a bearish path

In the previous report, CoinChapter covered Ethereum’s bearish Pennant formation, best visible on the four-hour chart. The pattern represents a consolidation period after a significant movement in a given asset’s price. It features two converging trendlines enclosing the price action and lowering the swing as the formation progresses.

Also read: Ethereum likely to reach $1.2K from $1.8K after bear pennant breakout.

The Pennant is a continuation setup. As it came after a 25% decline, the Pennant predicts another leg down after ETH exhausts the formation. Thus, the target price after ETH breaks below the Pennant’s support line stood at approximately $1,060. The latest 5% fit into the pattern’s bearish prediction, confirming the selloff fears.