Crypto Traders Spooked By Liquidation Of $52 Million Of Shorts On BitMEX
A Twitter Bot that tracks BitMEX liquidation released a post that seemed to have startled many in the industry. It confirms that over $77,000 was being wiped out from the exchange with a leverage of 1:100.
Liquidated short on XBTUSD: Buy 7,703,689 @ 10501.5 🏅💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯🔥⚡ ~ BEYOND GODLIKE x22 ~ Check your inbox
— REKT (@BXRekt) August 26, 2019
Charts taken in the late afternoon on Aug 25 showed that short Bitcoin positions were obliterated when BTC’s price saw a 4.8% surge.
The fact that the liquidation followed an elongated engulfing candle spooked many in the industry and the candle seemed to have appeared out of nowhere. As one could easily imagine, a sudden move with such a velocity in any direction is likely to cause the liquidation of a lot of open positions.
It looks like the short sellers were betting on Bitcoin following the falling trajectory to $9,000 or possibly under it, but that did not seem to happen. The support looks strong at $10,300.
If you look at the graph closely you can see that decline was pretty swift as well, although not as rapid as the move up. Notably, the short squeeze that resulted from this pushed the price of other correlated altcoins as well namely, Ethereum, XRP, Bitcoin Cash, Binance Coin, and Litecoin all saw corresponding upward price movement.
Noticeably, Bitmex was being probed by the United States Commodity and Futures Trading Commission (CFTC) for allowing citizens of the United States to access their crypto derivatives products. For US traders to legally use Bitmex, the platform would have to register with the CFTC first.