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Bitcoin [BTC]’s price hike results in the loss of $180 million for short sellers




Bitcoin [BTC]'s price hike results in the loss of $180 million for short sellers
Source: Unsplash

Recently, Bitcoin [BTC] breached the $7000 mark after being in the bear market for a long time. The resulting bull run saw the coin rise by more than 10%, with the total market cap increasing by $20 million. While the whole cryptocurrency community is rejoicing about the surge in the market, the short-sellers were grieving. The upward trend in the market led to a loss of $180 million short positions.

Bitcoin [BTC]'s sudden surge in value || Source: CoinMarketCap

Bitcoin [BTC]’s sudden surge in value | Source: CoinMarketCap

The short sellers of the cryptocurrency market refer to those investors who profit when the market is going down and is the bear’s grip. The short sellers sell borrowed cryptocurrency when the value is high and buy the cryptocurrency when the price has declined, thereby replacing the borrowed money and profiting off the dip.

BitMex, one of the leading cryptocurrency exchange platforms across the globe, provides this leverage for short sellers. Short sellers can have a minimum of 10x leverage on the platform and if a short seller fails to profit, they will lose only 10% of the initial margin.

Moreover, short selling is the opposite of long selling. Long sellers are similar to normal investors. They profit when the value of cryptocurrencies rise and undergo loss when the value of cryptocurrencies decline in the market.

Since Bitcoin witnessed an unexpected rise and there was no reason for the value to rise, the short sellers were caught off guard. This led to the liquidation of nearly $180 million in under 20 minutes of the hike on Bitmex. According to Cumberland, a mining company, six of the liquidated shorts were valued at $10 million.

In addition, the Twitter bot profile Big Rekts, a live reporting of BitMex liquidation, continuously update the profile after the hike regarding the liquidation taking place on the platform. There were more than 30 short sellers liquidating on BitMex.

Cobrafeet, a Twitterati says:

“Short funding is tighter than ever as well. Seems like a few parties have major control of the majority of the supply, accumulating all year. So yeah I’m long again”

World Series of Trading, another Twitterati says:

“people can’t add to their shorts which might cause them to close positions. man this trade is in a short as well”

Aurelius, a Twitterati says:

“To everyone that wants to short $ETP: Reminder that you must actually survive the short squeeze to end up making money off of the subsequent crash.”

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Priya is a full-time member of the reporting team at AMBCrypto. She is a finance major with one year of writing experience. She has not held any value in Bitcoin or other currencies.


HitBTC responds to allegations of insolvency, refutes claims made by Redditors




HitBTC responds to allegations of insolvency
Source: Unsplash

HitBTC, a Hong Kong-based exchange has been the center of accusations among users on Reddit, Twitter, and other forums. HitBTC users started complaining about issues regarding withdrawal and extensive procedures after one particular user @ProofofReserach put out a thread alleging insolvency of HitBTC.

To put an end to all the accusations, HitBTC has broken its silence with a blog post explaining their side of the story. According to HitBTC, their systems performed well during the winter of 2017-18, however, HitBTC mentioned that due to overwhelming demand for the services, they experienced bottlenecks at an operational level.

Referring to the BitcoinExchangeGuide article, HitBTC responded:

“A widely quoted article, in its entirety, is based on only 2 AML cases. One of them was initiated as part of the investigation into the December, 2018 BTCP security breach, at the request of the coin’s core team. Unfortunately, there is no clear indication of the nature of the second case that can be discerned from the article. The author of the article failed to track the deposit/withdrawal dynamics that did not uncover any irregularities. A simple block explorer or our public System Monitor would suffice for these purposes”

Additionally, referring to the altcoins being added and removed from the platform, the exchange said that they were honored to work with a diverse range of projects, however, since the crypto sphere was still nascent, there were lapses in their judgment in assessing the integration partners. With the above-mentioned prominent cases, HitBTC also addressed other topics.

@ProofofResearch replied to HitBTC’s blog:

“Is there a reason why you’re unable to tell people us where your Bitcoin storage is at? If what I published is as untrue as you claim it is, then providing a wallet address where your Bitcoin funds are stored will go a long way in *proving that*.”

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