BitMEX Derivatives Exchange Liquidates $700 Million worth Bitcoin

Bitcoin prices are crashing and creating a panic in the market. On Friday, the price of one Bitcoin reached $4,900, creating a new bottom this year. Now, the BitMEX derivatives exchange has also witnessed a massive sell-off.

A huge sell-off on BitMEX

According to BitMEX, they witnessed the largest order liquidation sequence in 16 months. It noted that crypto selling is happening in both long and short positions because of which there is extreme fear in the market. This could also lead to a further fall in the cryptocurrency’s price. In total, the exchange saw the liquidation of at least $702 million of orders. This is a record since November 2018, when a similar liquidating took place.

The cryptocurrency exchanges noted that it has only $4 million in buy orders but $698 million in sell orders. It turned out to be a rare market situation where Bitcoin showed the volatility of its early days. In general, it isn’t uncommon for Bitcoin to lose or gain 2k to 3k in value and experience several ups and downs during a week. However, the conditions are different this time because the selloff happened because of the coronavirus threat, not any other predictable situation or spike in volumes in shady markets.

What happens next?

It is difficult to decipher what happens to the markets next as the selloff continues on a global scale. People have started selling their holdings fearing that they will lose more if they wait for more. Now experts are wondering how deep the fall-off can go with the current coronavirus situation in mind.

According to the LMAX group’s Joel Kruger, the price of the currency can fall to $5,700. He said,

“We believe there is strong support in this area. Players who were committed ahead of the late 2017 rally would be happy to increase their exposure now in anticipation of bitcoin realizing its objective of being a haven and store of value.”

This huge fall in Bitcoin’s price alongside the world equity markets proves that Bitcoin may not be an adequate store of value as previously claimed. People who bought Bitcoin at the beginning of the year could be seeing deep reds in their portfolios as the currency continues its nosedive.