The recent crash of Bitcoin sent waves across crypto Twitter and there was widespread panic as enthusiasts half expected a major market crash. While some panicked, others remained calm and assessed the situation. It was noticed that there was a huge sell order on Bitstamp, which pushed the price of Bitcoin by ~20% in a few minutes.
The community noticed that a huge sell order of approximately 5,000 BTC was triggered on Bitstamp, which was the sole reason for the dump in Bitcoin’s price on Bitstamp. The exchange even put out an official statement saying that they have started an investigation into the matter.
The price of Bitcoin dipped as low as $6,194 on Bitstamp and on BitMEX, it collapsed to $6,380. A lot of investors blamed BitMEX for the dump. A Twitter user @DoveyWan, commented:
🤢🤢🤢 Bitmex is a great platform with great liquidity but its price index relies on two ex (Bitstamp and Coinbase) with shit liquidity, that defeats the whole purpose
20k+ BTC has been liquidated by a 5000 BTC dumping scheme pic.twitter.com/D8Lj2z9O5t
— Dovey Wan 🗝 🦖 (@DoveyWan) May 17, 2019
BitMEX is a leverage trading platform that trades a derivative of Bitcoin XBT. The exchange uses BitMEX.BXBT Index for the XBTUSD Perpetual Contract and XBT Futures Contracts.
According to BitMEX,
“The BitMEX .BXBT Index tracks the Bitcoin price every minute. The Bitcoin price is calculated from the last price at BitMEX Index. The .BXBT index price is shown on many pages as the current Bitcoin price.”
Since BitMEX only relies on two exchanges for the price and one of the exchange was affected, the price of Bitcoin dipped steeper on BitMEX as well. About $209 million worth of long positions were liquidated during the crash.
A Twitter user @lowstrife tweeted:
Bitmex insurance fund +750 btc from this dump. pic.twitter.com/BZBoAjmCFE
— lowstrife (@lowstrife) May 17, 2019
The liquidated Bitcoins were stored in BitMEX’s insurance, the balance for which had increased over 750 BTCs due to a crash in the price of Bitcoin for a few minutes.
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Bitcoin will likely be valued at $100,000 with a market cap of over $2 trillion before the end of 2021
The entire cryptocurrency market seems to be on the brighter side of the market since the beginning of the year. A majority of the coins have recorded significant recoveries from their 2018 slump, a period during which most coins lost over 90 percent of their value, when compared to their all-time highs. Among all the coins in the market, Bitcoin [BTC] aka the digital gold, was noted to be making a massive comeback as the coin breached the $11,000 mark after nearly 15 months. The coin however, soon retracted to settle below the $11,000 level.
According to CoinMarketCap, at press time, Bitcoin was trading at $10,887.27 with a market cap of $93.549 billion. The coin recorded a 24-hour trading volume of $20.757 billion for the past 24 hours and saw a massive rise of over 17 percent over the past seven days.
Anthony Pompliano, Co-founder of Morgan Creek Digital Assets, predicted that the largest digital currency could rise to reach $100,000, before the end of 2021. Pomp added that he was around 70-75 percent confident in this prediction. He stated,
“As I have previously said, making predictions is difficult […] Part of my process as a professional money manager is forming a thesis (price target), identifying a timeline (date), and establishing a confidence level. And then constantly re-evaluating those three aspects of my thought process as I receive new information.”
Pomp however, listed six pointers that have to be understood beforehand. First, this prediction is not an investment advice, and people should do their own research before investing in the digital currency. The second is with respect to Bitcoin’s volatility, with Pomp remarking that since it was a highly volatile market, the coin could witness a significant fall before being valued at $100,000. He stated,
“I anticipate that there will be numerous 20-30% drawdowns from new all-time highs as the asset continues to appreciate in value. These mini-boom/bust cycles should not cause panic, but rather need to be understood as natural market dynamics whenever an asset gains significant value in short periods of time.”
Further, the partner of the investment firm stated that the rise would be driven by several catalysts. This includes institutional adoption, exchange-traded funds and retail product approvals, global instability, governments all across the globe manipulating currencies, markets and economy. He went on to state,
“The market cap of Bitcoin will reach $2+ trillion when Bitcoin is worth $100,000. This is less than 1/3 the market cap of gold and less than 1/40 the global money supply.”
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