Bitcoin Trader Loses $11 million in less than 24 hours
As the downtrend of the digital currency market intensifies, mass multi-million dollar liquidations may take place again. Back on Thursday last week, the price of BTC shortly fell below the $3,600 mark on BitMEX leading to liquidations of over $1.2 billion in long term orders.
A sharp correction of bitcoin’s price escalated as its price reached $5,000 from $7,900 representing approximately 35% in the price drop. The inception of pullback resulted in huge amounts of long contracts undergoing liquidation or deleverage. As a result, the BitMEX liquidation engine initiated the sale of bitcoin worth millions of dollars.
On numerous occasions, big accounts on cryptocurrency exchanges trade with low leverage reducing the chances of a possible liquidation. However, when the BTC price plunges by about 30%-40%, even accounts trading using small leverages are not safe from liquidation. Ultimately all the accounts with over $10 million begun getting liquidated.
Insufficient BTC demand from buyers
Moving forward, a cryptocurrency trader going by the name ‘I am Nomad’ on Twitter, shared a screenshot of a South Korean BitMEX user, who lost 1220 BTC worth about $11 million at the time; before the massive 50% plunge.
The price of BTC has already recovered from the $3,600 low but has twice rejected the $6,000 mark within the last 48 hours. The acute rejection at $6,000 is a frail rejection compared to the antecedent annual low of $6,400. This means that there is minimal demand for BTC from buyers with the cryptocurrency falling further below the $5,000 mark.
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