Updated: Bitcoin (BTC) Price Dump Explained. Here's What Happened

Sun, 01/19/2020 - 14:01
Vladislav Sopov
Bitcoin (BTC) price dips below $8550 losing 5,6% in three minutes. Why did it happen? Could someone predict this crash? And will the price of crypto king recover soon?
Cover image via 123rf.com

Update: The price of Bitcoin (BTC) is currently changing hands at $8,631, CoinStats data shows. The leading cryptocurrency has barely budged since its precipitous drop that was recorded earlier today, which means that more volatility could be in store for traders.           

Today we have seen the first volatility spike of Bitcoin (BTC) price within the extremely bullish market of early 2020. It had been predicted. Moreover, now it is explained. 

Massive liquidation

Recently, Deribit futures & options exchange revealed the market manipulation that caused today's rapid price decrease. It occurred at 11:00 AM (UTC) exactly.

Image by: https://twitter.com/DeribitExchange/status/1218866820557484033

 Someone shorted an enormous sum of $101M in Bitcoin (BTC) perpetual contracts (BTCUSD) between 11:00 and 11:10. That's how the market responded:

Image by: https://www.tradingview.com/symbols/BTCUSD/?exchange=BITSTAMP

Thus, the most stunning bearish spike of this January is caused by the market dump of some Deribit whales.

Was the bubble predicted?

So called 'CME gap' or the bubble on the BTCUSD futures market had been mentioned by Dutch analyst Michael van de Poppe two hours before the dramatic liquidation.

Image by: https://twitter.com/CryptoMichNL/status/1218816533805326336

It looks like his second prediction is also playing out as Bitcoin (BTC) is trading at almost $8600 at printing time. By the way, both scenarios by Mr. van de Poppe are optimistic. As a result, we shouldn't brace ourselves for further Bitcoin (BTC) price dumps.

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About the author

Blockchain Analyst & Writer with scientific background. 5+ years in IT-analytics, 2+ years in blockchain.

Worked in independent analysis (Crypto Briefing) as well as in start-ups (Swap.online, Monoreto, Attic Lab etc.)

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