The rate of the first and most popular cryptocurrency – bitcoin – fell as a result of this fall to $82 thousand. Back in early October, it was actively growing and reached its maximum of $126 thousand. Thus, during this period, bitcoin lost a total of 33% of its value, RBK calculated.
As the publication notes, the sharp decline in the crypto market led to a massive closing of positions by traders. RBK refers to the data Coinglass, according to which within an hour were liquidated positions of 392 thousand traders for $ 971 million. The overwhelming part ($ 956 million) came to the longs – positions of those who counted on the growth of rates.
“When they talk about liquidations in the crypto market, most often we are not talking about the sale of bitcoin as such, but about the forced closing of positions on perpetual futures (perpetual futures, perps). Such contracts allow you to open transactions using borrowed funds (leverage) without buying cryptocurrency directly and without a time limit. Due to high liquidity, no expiration date and the ability to trade with leverage of up to 100x, perps have become the most popular derivative on the crypto market,” the publication explains.
The head of Bitmine Tom Lee in an interview with CNBC explained that the main problem of crypto markets lies in the weakness and mistakes of market makers, who “perform the function of central banks in the crypto market”.
