Bitcoin experienced an unusual drop on crypto trading platform BitMEX late Monday, plunging by 87% from an opening price of $68,398 to a dramatic low of $8,900. This event occurred at 22:30 (UTC) following a massive sell order. Prior to this collapse, from 20:00 UTC, Bitcoin’s value on BitMEX began to deviate significantly, initially falling to $59,570, while other exchanges reported prices above $66,000.
The series of price drops continued, with Bitcoin hitting $50,000 at 21:45 and then $38,200 fifteen minutes later, despite brief recoveries to normal trading levels. A subsequent recovery above $64,000 was short-lived, as a steep drop brought it down to $8,900 by 22:30, marking a return to price levels last seen in April 2020.
Although Bitcoin quickly recovered from this low, it continued to trade at a slight discount to other platforms on BitMEX, where it was trading at roughly $65,028 in the wake of the event. Blockchain Daily, a macroeconomic news platform, identified the root of these drastic movements early Tuesday, attributing them to the sale of 400 BTC worth approximately $26 million at unusually low prices on BitMEX’s spot market.
This incident, caused by a single seller’s decision to sell bitcoin at these prices, significantly impacted market stability due to BitMEX’s relatively low market depth, which was recorded at $25,669. The platform describes the term rouge seller as someone who “engages unexpected sale of a large volume of assets,” disregarding its potential “negative” impact on market prices.
Blockchain Daily added that the seller “lost tens of millions of dollars” by executing the trades at significantly lower prices. However, it speculated that this could have been due to a faulty algorithm, used in trading bots.
BitMEX, known for its lower liquidity among leading exchanges, is more vulnerable to such significant price manipulations. The platform’s BTCUSDT pair has the lowest depth among the top 10 pairs on CoinMarketCap. The exchange has since confirmed it is investigating the large sell orders that led to this anomaly, emphasizing that the derivatives market and the index price for XBT derivatives contracts remained unaffected, thereby preventing any liquidations.
Meanwhile, the narrative around Bitcoin remains bullish despite a 5% drop over the past week. Standard Chartered analysts now expect Bitcoin to reach $150,000 by year’s end. The analysis compared ETFs to gold prices, predicting a bright outlook for Bitcoin. The January launch of spot bitcoin ETFs in the U.S. influenced Standard Chartered’s projection of Bitcoin reaching $250,000 next year before stabilizing around $200,000.
