It has become known over $190 million worth of Bitcoin long and short positions were liquidated on well-known derivatives exchange BitMEX.
Bitcoin price dropped to $8,593. This development occurred yesterday. Sources indicated that the cryptocurrency markets lost big time. $190 million in Bitcoin was reportedly liquidated on the BitMEX exchange.
Bitcoin Liquidation on BitMEX
These assets were formerly in the form of derivatives before their liquidation. They were also a combination of long and short positions in the cryptocurrency markets. Market data indicate that $190 million worth of short positions forced prices to dip to their current levels. Only about $6.1 million long positions were liquidated.
Analysts have offered mixed reactions to the recent developments. Many are considering that global markets are in a tailspin right now. This is coming off the effect of the current situation concerning the coronavirus. Many are concerned that the World is facing an epidemic. Global supply chains are facing gaps. Markets across Asia are already in the doldrums. The west is expected to follow suit. Cryptocurrency markets have not been left out either.
Cryptocurrency Prices Could Head in Any Direction
What analysts can’t make their minds on is on the permanence of this price reversal. Traditionally cryptocurrency prices go up during tums of crisis. The eternal optimists are expecting a quick reversal. The pessimists are expecting the markets to continue sliding. The moderates, as usual, are in the middle. They think that the situation will remain fluid as cryptocurrency markets are volatile as they are fluid due to their decentralized nature.
Both the Dow Jones Industrial Average and the S&P 500 have been down 7% this week alone. This is a reflection of the fears that are currently going through global markets right now.
Bitcoin’s dominance, however, seems unaffected as internal factors seem to remain the same within the cryptocurrency markets. The dip has also wiped out a significant portion of the gains made this year. Sources indicate that the markets have dropped more than 7% since yesterday.
Before now, many had expected that Bitcoin price will stay above $9,000. $9,00 is psychologically a support level for many. They have believed that this level indicated that cryptocurrencies, in general, aren’t correlated to global markets.
In a sense that may be true. Bitcoin price has historically tended to move based on internal factors rather than the factors that have affected the global community. However, critical factors such as global health crises haven’t occurred on this scale yet.
Bitcoin Price Could be Affected by Health Issues
We may look at a historical moment where everyone’s health could affect cryptocurrency prices. Then again, prices may rebound and the optimists could be right. Cryptocurrency markets are nascent. As such, they are sensitive to just about any event that occurs. Hence their volatility. This singular nature could cloud the analysis of many who predict every movement of the ticker as either victory or doom. How that plays out in the long term is usually what many of them don’t fathom.
Then again, this is what hodlers are for. Long-term positions seem to suffer the least. As at the time of filing this report, Bitcoin (BTC) price stood at $8,798. This is a 4.36% within the past 24 hours. Dominance also stood at 64.1%.
Christopher Haruna Hamman is a Freelance content developer, Crypto-Enthusiast and tech-savvy individual. He is also a Superstar Content Developer, Strategy Demigod, and Standup Guy.