- Bitcoin crashed by 10 thousand USD despite positive developments.
- Many attribute the crash to over-leveraged bullish positions.
- Analyst says that single-day dumps are becoming the norm for Bitcoin
The recent bitcoin crash left people surprised as market developments were positive. After all, El Salvador officially adopted BTC as legal tender. Aside from that, hodlers also organized buying bitcoins in celebration of El Salvador’s bitcoin day.
It was a bullish run, and BTC closed in on 53K USD, but it suddenly took a negative turn, dumping by 10K USD in a matter of hours.
In an analysis published on crypto data firm CryptoQuant, it shows that “the volume of Long Liquidation in less than 1 hour can confirm that this price fluctuation was majorly Futures Market-driven.”
Alameda Research CEO Sam Trabucco agreed with this notion. In a tweet, he said that
when crypto rallied a ton to $65k pretty quickly, futures were at high premia, and open interest of all the important contracts was up.
Bitcoin analyst Lark Davis also took to Twitter and shared his two cents on the matter. Davis agrees that it may be due to bitcoin’s market being highly leveraged.
Epic single day dumps are the norm for #bitcoin, we have made so many single day red candles this year with -10% and -20% and even one -30% dump.
This is a feature of the highly leveraged market. Anticipate it. pic.twitter.com/yPiYClPliH
— Lark Davis (@TheCryptoLark) September 8, 2021
However, all things considered, Davis also reminded his followers that bitcoin is still going to the moon. In another tweet, he said that
bitcoin is still going to 100k, just in case you needed a reminder.