As it seems, there’s no end in sight for the whirlwind surrounding Bitcoin’s price in 2019. After positive predictions from BitMex CEO Arthur Hayes last week, Bitcoin took a serious dip yesterday, falling below $8,000 for the first time since June. Ironically, the price drop may have occurred due to mass liquidations over at BitMex.
The meltdown started around 18:30 (UTC) on Tuesday and went for half an hour before stabilizing. Until then, though, it was already bad news for crypto traders, sending the market in a selling frenzy.
To cut their losses, investors closed their positions which saw the market lose close around $30 billion in just 24 hours. The leading cryptocurrency in the world fell to its lowest point since June, confirming the fears of many crypto investors voiced over Twitter in the past few weeks.
What Caused the Price Decline?
Most likely, the price drop was a result of contract liquidations and margin calls on BitMex. BitMex is an exchange based in the Seychelles which provides its customers with unreal 100x leverage. In simple terms, it gives loans to traders who multiply their investment 100 times. There’s still no information on what led to the mass liquidations at BitMex who were first reported on datamish.com.
Due to the serious price decline, expectations on a quick recovery are low in the crypto community. Currently, the market is in a long squeeze position in which investors who hold long position feel the need to start selling. It’s no wonder considering what happened yesterday. Another price drop and the crypto market will face massive losses once again, which doesn’t spell good news for Bitcoin or altcoins in general.
While on the subject of altcoins, Tuesday was nothing short of a bloodbath. The market saw up to 34% losses on the top 20 coins, with double-digit losses for many. Ethereum’s price alone has dropped more than $50 in a span of 24 hours. The worst part is that the decline is still ongoing, with no sign of altcoin stabilization anytime soon.
Huge Pressure on Buyers
With the latest Bitcoin price drop, the pressure is on buyers to retain the 200-day moving average ($8,311) and the bullish status. If the price falls below that support, it would spell a bearish trend for the remained of 2019. It’s the exact opposite of what Bitcoin needs right now. Just a week ago, the leading cryptocurrency was stable over the $10,000 mark and there were hopes for another explosion. However, falling below $8,000 for the first time since June doesn’t give traders much hope.
The slide is definitely a rare event, even for Bitcoin. Some experts think that this is the last step before the suggested boom, but others are less optimistic. Bitcoin trader and tech analyst CryptoMichael tweeted that the next price zone to watch is at $7,500. He suggested that there’s nothing to worry about since Bitcoin is still staying above. Let’s see what happens next week.