The cryptocurrency market is not doing well. Companies are on the brink of collapse and prices are plummeting. Bitcoin fell to $15,550 on most exchanges last night. The price chart of cryptocurrency exchange FTX even shows that Bitcoin has fallen below 13,000 euros.
Bitcoin price is falling hard and fast
In the chart below, each candle represents 4 hours. The price of Bitcoin looks so dramatic and seems to have lost all ground. A few days ago, Bitcoin flirted with 21,600 euros, but it was unscrupulously stolen from the left.
The chart is from BitFinex, an unrelated exchange.
Unrest FTX yields Bitcoin worth 13,000 euros
It is rarely clear why bitcoin falls or rises, but it is now safe to say that the failure of cryptocurrency exchange FTX is behind it. For a moment, it looked like Binance could help, but the exchange saw FTX’s books and decided to get their hands on it.
Although FTX is on the brink of collapse, many of the exchange’s features still work. So you can still see the prices. In the chart below, the value of Bitcoin is expressed in euros and the data comes from FTX.
Each candle represents 1 hour and as you can see Bitcoin has fallen below $15,000.
Play at a lower bitcoin price
This, of course, fueled further panic in the market and experienced traders opened a short position. A short position means that you enter a so-called futures contract, where you bet that Bitcoin will fall in value in the future.
Play Bitcoin to infinity
This bet is attractive to traders during periods of a certain high or low (if any). Especially since cryptocurrency futures have contracts with no end time and you can close them at any time. The danger is that you always have to keep an eye on the price or you will lose everything.
For such a perpetual contract you have to provide securities. If your contract is compromised, the exchange you contracted with will take some of that security to cover your move.
Liquidated short positions in Bitcoin
According to analysis firm Santiment, Bitcoin’s decline has convinced many traders to go short. Data from the on-chain analytics platform shows that cryptocurrency exchange DyDx has recorded the highest betting-to-BTC price ratio since August.
But no prize (except the FTT prize) comes out unscathed.
During this time of recovery, many traders lose their favorable short positions and the collateral may become depleted. The question then becomes how deep the pockets of the trader go to further supplement that guarantee. According to Santiment, this happened this morning.
Bitcoin crashed on FTX?
But something more interesting is happening. Bitcoin fell to $15,000 on FTX, many customers fearing they would no longer be able to withdraw their coins from the exchange and aggressively opened a buy, the opposite of a sell. So you’re guessing Bitcoin has bottomed out and will recover.
Source: Btc Direct
John Cameron is a journalist at The Nation View specializing in world news and current events, particularly in international politics and diplomacy. With expertise in international relations, he covers a range of topics including conflicts, politics and economic trends.
