Bitcoin reached its highest rate this year just minutes before the unexpected and sharp freefall on Sunday.
The world’s leading cryptocurrency entered the week with around $10.250 last Monday. The Bitcoin price constantly climbed up the whole week and even tested the limit of $12.000 this Sunday when it suddenly dropped by nearly $1.050 within an hour.
According to the Forbes report, the Bitcoin touched the $12.074 on Bitstamp cryptocurrency exchange minutes before the freefall to the lows of $11.023 in nearly an hour. The drop of nearly 9% stabilized later as the price continues to fluctuate between $11.200 and $11.050. It sits at the level of $11.215 at the time of publishing and is still 22% higher compared to the month ago.
Reportedly, over $1.4 billion worth of liquidation orders were activated within 24 hours, according to the data of cryptocurrency derivatives data aggregator Bybt. The largest single liquidation order of $10 million came from the BitMEX crypto derivatives trading platform, known for its high leveraged trading volume.
Cryptocurrency exchanges OKEx and Huobi however were the ones with the similarly highest amount of liquidation orders, both accounting for over $469 million each. Meanwhile, BitMEX and Binance recorded orders worth $215 million and $140 million respectively. The vast majority of liquidation orders were long positions, a similar tendency across different cryptocurrency trading platforms.
The reasons behind the sudden Bitcoin price drop were not clear. However, the market experts guess it might be induced by the whales, the so-called investors or traders with large amounts of assets in their portfolios, that make a real impact on the market when moved.
The crypto exchange Binance shared an announcement accordingly stating that a single user placed a large number of orders over a short period of time resulting in the sudden price fall of almost $100.000 on the Binance trading platform alone.
According to Forbes, the market is more vulnerable to such kind of movements during the weekends. The trading volumes usually drop on Saturday and Sunday, leading to higher price volatility.
The Bitcoin rally accelerated last Sunday, July 27 when the world’s benchmark crypto broke the resistance of $10.000 and climbed to over $1.250, the highs last seen weeks before the mid-March market crash.