A few days after Bitcoin’s market cap surged past $1 trillion, it’s back to square one for the market’s leading cryptocurrency. On the back of a 17% price drop on the charts, the cryptocurrency’s market cap fell below the aforementioned level again, with the same observed to be hovering around the $900 billion-mark, at press time. In fact, the said drop saw BTC go as low as $45,767 on the charts.
What’s more, the last 24 hours saw the largest liquidation event across Bitcoin Futures. Crypto-exchange data aggregator Bybt called it “the craziest day in Bitcoin Futures history.” According to the same, over 470,000 traders’ positions were liquidated for an amount of $4.4 billion across crypto-exchanges.
— Bybt (@bybt_com) February 23, 2021
A majority of these liquidations were observed across leveraged long positions, with many traders clocking their most significant losses since the start of the bull run.
It should be noted, however, that some traders reported being unfairly liquidated due to certain “flash crashes” across some exchanges.
In fact, reports suggest that the price of ETH on Kraken momentarily fell down to $700, before rising back up to $1700. Similarly, some traders say the price of ADA on Kraken reportedly hit $0.15 briefly, leading to many traders being “unfairly liquidated.”
1/ Update: We saw the price of some digital assets such as ETH and ADA have a sharp downward movement this morning on multiple trading venues just after 2:00 UTC. Kraken also saw a surge in selling around this time.
— Kraken Support (@krakensupport) February 22, 2021
In fact, Kraken was quick to comment on the said flash crashes, with the platform stating that a surge in selling volume was observed across multiple exchanges. However, most traders were not convinced by the exchange’s response.
“Don’t try to claim that legitimate sell orders pushed Eth to $700. This didn’t occur anywhere else in the entire market,” said one user on Twitter
According to others, the issues observed on the exchange have something to do with Kraken’s lack of sufficient liquidity.
Market makers tend to remove their bots when there is excess volatility in the market, leading to effectively all liquidity being removed, triggering one stop-loss after the other.