Massive liquidation of over $1.3 billion of crypto products on exchanges has led to the Bitcoin price decline to $8600 just two days after exceeding $10k.
Liquidation of the excessive leverage caused crypto prices decline. The current downward tendency has also spread on the altcoins’ market. All of the top-10 altcoins are falling: Bitcoin Cash (BCH), Litecoin (LTC) and EOS have suffered most. According to Datamish, a platform that tracks long and short BTC positions on Bitfinex, over 950 long BTC positions were liquidated last Sunday. Actually, closing of the above-mentioned positions indicates the rapid decline with excessive leverage on several platforms.
The reason for such a massive liquidation may be the anticipation of a sharp Bitcoin increase that would make traders place long positions with excessive leverage. This enthusiasm was supported by the recent rise over $10 000. Nevertheless, the crypto rating suddenly changed and this surprised traders. In the background of current losses the technical director of Bitfinex Paili Ardoino wrote on his Twitter, “The leverage comprises 5x at most. So when a liquidation occurs the real value is being reduced”.