On August 2, the price of Bitcoin dropped nearly $1.4K and $1 Billion liquidity happened in the market within minutes. Similarly Ethereum price also slashed by 21% and price of BTC came down from around $12,000 to 10,500. Alt coins also plunged by 10 to 15% in price but there was a quick recovery in a short period of time.
But recovery couldn’t be fair for some traders as $1 Billion worth crypto currencies were liquidated suddenly.
The reasons behind this sudden move in the market could be weekend and buyer’s intend. Pricing of crypto currencies often drops because of some active traders in the market. Small trading volume leads to big price movements. It creates selling pressure on traders resulting crypto currencies becomes more vulnerable.
How did it happen?
On Sunday morning, Bitcoin price suddenly moved down from $11429 to $10550. Active buyers again pushed the price up and market prices get recovered.
Mass liquidation could be noticed in past few months. Reasons may be different like halving or pandemic. But remarkable incident happened on March 13 when liquidation of around $1 Billion occurred. Similarly mass liquidation happened right before halving on May 11 when Bitcoin price dropped to $8100
Larry Cermak director (The block) tweeted
Top rated crypto currency exchanges like BitMex and Binance futures use a hack called FUNDING to keep the balance in the market by providing with the incentives to holding accounts as well as encourage short term traders by offering them bonus or airdrop on trading volume.