The Bitcoin breakdown analysis report is due to this cause group

While many retail investors have sold part or all of Bitcoin, the main reason for the tumbling cryptocurrency market is institutional or professional investors according to data provided by Chainalysis.

Whales boost volume on exchanges

Follow report Recently, Chainalysis, the trading volume on the floor has increased to a new all-time high, mainly by the bear control. Starting March 9, exchanges around the world reported unprecedented performance from people looking to sell Bitcoin. The blockchain analysis firm says the platforms it tracks receive about 475,000 more Bitcoin than the average on March 12 and 13, nine times more than usual.

The Bitcoin migration occurred in the context of general panic caused by the Corona virus pandemic to major economies. Stock markets, oil and other traditional assets are falling to new lows, with central banks pumping unlimited cash.

While Bitcoin is often considered a safe haven, especially in times of crisis, it has lost half its value from the peak of February.

Unsurprisingly, the biggest cryptocurrency has been dumped by institutional investors. They are the people who are always welcome to take the market to a new level.

Chainalysis found that 10-100 and 100-1,000 BTC transfers accounted for about 70% of all Bitcoin sent and received by exchanges in recent days, which is a bit higher than usual. . Interestingly, about 10% of Bitcoin comes from transactions that transfer more than 1,000 BTC. The conclusion report:

"These trends show that wealthy traders and professional investors are pushing the market, but there are a large number of retailers involved in both selling and buying."

Will Bitcoin price stabilize?

Is it because most institutional investors leave the retail holders to hold the market? Indeed, Bitcoin has been moving sideways since last Thursday, while US and European stock markets, along with oil futures contracts, hit new lows.

The oldest cryptocurrency has recovered some of its recent losses, gaining a 17.98% increase in the last 24 hours and is trading at $ 6,227.

Chainalysis concluded that with the uncertainty surrounding the COVID-19 pandemic, it was difficult to predict where the Bitcoin market would go next.

However, when the panic disappears, the whales will return to push the crypto market higher.

BitMEX is not the cause

Managing partner and co-founder Kyle Samani of cryptocurrency hedge fund Multicoin Capital said the cryptocurrency market structure was "broken" last week due to congestion in the Bitcoin blockchain and the activities of miner.

Samani drew conclusions in one posts on Wednesday titled "March 12: Breakthrough of the cryptocurrency market structure". Last week, Bitcoin collapsed nearly 40% in a day with $ 890 million liquidated on the BitMEX derivatives exchange.

“0 / Last Thursday was the craziest day I've ever seen in any capital market

Cryptocurrency market structure is broken

A brief article and a topic

Part 2 will be posted on 5th (could be Friday)

There is currently no bTranslation but soon have

BitMEX was subsequently blamed for exacerbating the rare reduction situation of the coin. In particular, the CEO of rival derivatives company FTX alleged that the group behind Bitcoin futures trading platform had 100 times leverage stopped trading in 45 minutes when the price collapsed, Bitcoin may have collapsed completely. safe to zero due to BitMEX's ineffective liquidity tool.

Samani agrees with this serious claim:

“At one point, there was only ~ $ 20 million bid on the entire BitMEX order book and over $ 200 million long positions for liquidity. This means that the price of BTC could have collapsed in a short time to $ 0 if BitMEX was not frozen due to "maintenance". With BitMEX's central position in the cryptocurrency market structure, this price move may have been transmitted across all other BTC trading locations. ”

Seychelles-based BitMEX made a number of statements following the shutdown due to a sophisticated botnet attack that exploited a hardware flaw.

BitMEX is completely innocent

But market commentator Samani frankly and is a regular contributor to the Multicoin blog saying that the BitMEX disaster is a symptom of an ineffective market - not the cause of BTC collapse.

According to Samani, during the probationary period, BitMEX's order book was not quickly balanced due to the congestion in the Bitcoin blockchain. The situation became worse when the miners stopped working. Indeed, at the time of the Bitcoin flash crash, the average confirmation time skyrocketed to a 7-month high, while the hash rate began to stall.


Average confirmation time of Bitcoin | Source:

People with arbitrage (who play an important role in efficient and reasonable markets by keeping price discrepancies between multiple locations to a minimum) were unable to send BTC on BitMEX and give it to buy side.

According to Samani, if they regularly upgrade the infrastructure, it will reduce the chance of a similar event in the future but eventually fund managers blamed Bitcoin's low flux for this failure, said they cannot currently "support the operation of the global capital market".

When compared to the approximately $ 5 billion trading volume that caused the Bitcoin crash on March 12, the global forex market processed about $ 5K billion a day, nearly 1,000 times larger.

You can see the price of Bitcoin here.

Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

Thuy Trang

According to AZCoin News

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