Bitcoin’s rally had everyone surprised but also pushed all the bulls out of the closet. The rally was a sharp parabolic rise and too good to be true, hence a lot of the traders waited for a healthy correction. Bitcoin dropped by more than $1,500 in less than 2 hours.
The correction phase, at the time of writing, was still underway and the prices have dipped as low as $6,192. The market cap of Bitcoin, as seen on CoinMarketCap was at $128 billion.
A Twitter @Bitfinex’ed, and a critique of Bitfinex, pointed out how the Bitfinex premium rose as the price of Bitcoin collapsed.
Well look at that Bitfinex premium! pic.twitter.com/nWedMnPpjZ
— Bitfinex’ed (@Bitfinexed) May 17, 2019
Bitcoin was recovering from the sudden dump, however, the extent of the dip in the price of Bitcoin varied on different exchanges. On Coinbase, the price dipped as low as $6,600, on Bitfinex, it dipped to $6,990. The drop was perhaps the most on Bitstamp exchange as it dipped at $6,178.
The shorts took control of Bitcoin, leading to a crash in the price. At press time, as seen from the charts, the shorts continued to gain more momentum, which could indicate the upcoming move in Bitcoin.
Moreover, the liquidation of longs due to this massive dip on BitMEX reached a total of 104 million contracts, which, in total, were worth $207 million.
The dip in the prices could be attributed to the New York Supreme Court’s order to freeze further transfers to Bitfinex from Tether.