Bitcoin [BTC] Dec. Futures on BitMEX Plummets to $8500 Twice in 15 Minutes

Bitcoin Futures Open Interest OKEx BitMex

In a violent shake-out of futures traders on BitMEX, the December futures index records a $1200 difference between lows and highs in less than 30 minutes.

The XBTZ20 contract on BitMEX set to expire on 25th December 2020, drops to $8500 beginning with the 5-minute candle at 12:55 Hours UTC. Within the next 30 minutes, the price touches the lows once again followed by a massive surge to tap $9772 highs.

According to datamish, over $664,800 longs were liquidated on BitMEX in the last hour. Given, the volatility on spot prices has been limited, one can assume that majority of the liquidations were influenced by the price action in December contracts.

30 minute chart bitmex tradingview
XBT (DEC Futures)/USD 30-Minute Chart on BitMEX (Source: BitMEX)

The move was targeting the leveraged long orders for the contracts, as it taps the lows twice with wicks, within a span of 15 minutes. However, according to trader, XC, it did not cause any liquidations and is a common occurrence,

0 liqs just a broken algo, has happened tons of times across various spots / futures markets.

xbtusd 5-minute chart bitmex
XTB (Dec Futures)/USD 5-Minute Chart on BitMEX

Panic Sell-Off?

Nevertheless, co-incidentally, on the perpetual swap markets, the drop seems to have initiated a quick sell-off to $901x. At press time, the price is trading at the mid-point, at a price of $9055.

The funding rate on BitMEX indicates neutral market sentiments towards Bitcoin, but a long inclination towards Ethereum.

xbtusd perpetual swaps
XBT/USD 5-Minute Chart on BitMEX (TradingView)

Despite valid explanations, the instances of market slippage and uncalled-for liquidations are seen far more often on BitMEX than other derivates platforms. The untethered leverage with high liquidity makes the platform highly lucrative for whale actions.

Lately, the Open Interest (OI) on Okex has been at par with BitMEX as well.

bitcoin futures open interest
Bitcoin Futures Open Interest (Source: Skew)

Be it broken algo or whale-sized orders, massive swings of such proportions make the investments in these contracts very risky. Moreover, it also strengthens the arguments against manipulation which further delays the regulatory progress.

Lately, traditional markets have seen violent swings as well. Which markets do you think are more organic: Crypto, Equities or Commodities? Please share your views with us.