On a day of carnage, Bitcoin suffered a major price correction that saw the world’s most popular crypto fall by more than 20%.
Analysts are now combing data to see if anything specific sparked the liquidation of over $5 billion in Bitcoin futures, or whether the market was simply due for a correction.
In the past 24 hours, 616,614 traders had their overleveraged positions liquidated as Bitcoin continued to plummet. When BTC’s value falls below the liquidation price, crypto exchanges force traders to liquidate as they become unable to meet the requirements of their leveraged position.
Did One Transaction Cause the Crash?
In a new twist to the ever-developing story, data analytics firm Santiment has spotted that one address cashed out $156 million — just in time to beat the BTC price crash.
It’s now thought that this sell-off of 2,700 BTC, which happened as Bitcoin hit an all-time high of $58,300, played a part in the 20% plunge. Following this transaction, one of the biggest seen in 2021, BTC experienced the biggest one-hour candle in its history.
Santiment went on to tweet about its discovery, stating:
“As we noted yesterday, there was an 11x exchange inflow spike that initiated #Bitcoin's price correction from its $58.3k #ATH. Further data combing revealed that an address was responsible for the 2nd largest $BTC transaction of the year, an import of 2,700 tokens to the wallet before a quick sell-off.”
Many crypto enthusiasts such as investor Raoul Pal have noted that the price dip was typical of the highs and lows of Bitcoin — commenting that it was a great time to take advantage of a dip.
With many Bitcoin futures contracts set to expire on Friday, analysts are now speculating as to whether the price of Bitcoin will fall even further before making a recovery.
Subscribe To Our Newsletter!
Get all of the day's top crypto news stories direct to your inbox by subscribing to the free CoinMarketCap newsletter.