On March 12, the entire cryptocurrency market changed unexpectedly. Bitcoin price dropped by more than 50% in a 24-hour period, forcing traders to liquidate $ 1 million worth of long positions in 2 days.
The data shows that from that day, the wallets owned by the company massively withdraw money from leading Bitcoin derivatives platform BitMEX.
Investors rushed to withdraw Bitcoin from BitMEX
According to the data from TokenAnalyst, in the past 2 weeks (14 days to be exact), more Bitcoins have been withdrawn from BitMEX than were deposited. The estimated number is up to 67,000 BTC (worth over $ 400 million). Blockstream's Zack Voell tweeted:
“The net cash outflow of BitMEX exploded after Dark Thursday.”
– Zack Voell (@zackvoell) March 27, 2020
Continuing to validate the reduced BitMEX usage rate (and possibly other margin trading platforms), CL analyst revealed that spot BTC trading has started to increase while BTC's derivative trading has decreased:
“Observe the spot volume and the derivative. The spot market only had a market share of about 3% until the dark Thursday and now it is 8% of the Bitcoin market. ”
Monitoring spot and derivative volumes.
Spot markets only had a market share of around 3% until the black thursday, and now it is a good 8% of the Bitcoin market. pic.twitter.com/lFTR1B2DLz
– CL (@ CL207) March 27, 2020
Why is this happening?
There does not seem to be a specific explanation for this trend, however, it is still possible to explain the following about the massive amount of money running out of BitMEX into wallets.
- Firstly, the huge Bitcoin line from BitMEX came when some prominent traders (Romano, 'Salsa', etc.) started promoting alternative trading platforms such as ByBit and FTX (which are exchanges under Binance). . Traders call for a different platform by citing a sudden shutdown on the day of the market crash on March 12, along with an increase in BitMEX's insurance fund on the day of the incident while the insurance fund of other margin trading floors decreased.
- Second, leading trader “I am Nomad” noticed that BitMEX is using the new position “AML Operator Manager” to work in Hong Kong. Job description including “two main functions”, which refer to the development and management of “customers who perform accountability for institutional and retail customers onboarding or existing on the BitMEX platform. They will be responsible for the customer screening process regarding AML requests and sanctions. ” According to the Nomad, the hired individual will “design the KYC plan for the general customer” and “we all know that such a plan has been developed for the public”. Well-known traders in the community claim that if the company adds KYC, they will use another platform. In fact, some people start to abandon the platform when job postings are posted.
- Tuesday, data pointed out that BitMEX's Bitcoin futures liquidity has been exhausted following the incident, meaning traders can look for other locations through which they trade large contracts or risk losing money. lots of money due to lower prices and low liquidity risks. Or, as some analysts have suggested, certain big players / organizations will leave the cryptocurrency market altogether.
Finally published “Liquidity Bands” on @tradinglite
Fairly self explanatory, it essentially visualizes… ..liquidity.
Here’s a $ 100m contracts spread on Mex. MMs dead. pic.twitter.com/ZST7EgE0iY
– Hsaka (@HsakaTrades) March 27, 2020
“Publishing” Liquidity Strip “on TradingLite
Self explanatory, basically visualizing… .. liquidity.
This is a $ 100 million contract on Mex. ”
HODL psychology is synonymous with price increases
Although the outflows may signal that BitMEX is losing its dominant margin position, it also reflects the increasing HODL Bitcoin trend.
According to cryptocurrency analysis firm Glassnode, as of March 18, “Bitcoin holders have a tendency to withdraw money from exchanges”, making the total balance of the exchange hit its lowest level in 8 months.
Despite the volatility, #Bitcoin holders appear to be withdrawing their funds from exchanges. Outflow has been increasing daily since March 18.
– glassnode (@glassnode) March 26, 2020
“Despite the volatility, Bitcoin holders tend to withdraw money from exchanges. Cash outflow has increased daily since March 18.
The balance of BTC at the exchange reached the lowest level in ~ 8 months ”.
Accordingly, instead of trying to trade and increase the stack, investors concealed cryptocurrencies in self-owned wallets in anticipation of a higher market, especially when the halving is about to come and central banks. just as governments around the world continue to pump money to help prevent the economic impact of the outbreak.
BitMEX rotws out of the top 3 Bitcoin derivatives exchanges
According to data compiled by trader and AI / cloud expert at Joe McCann share, the volume since March 29 of the derivatives tools on BitMEX (from Bitcoin to the altcoin pairs) has been transferred over the volumes of derivatives on Binance, OKEx and Huobi Global.
In fact, according to the data, BitMEX contracts traded for $ 1.46 billion over the past 24 hours while Huobi, the leading derivative platform, had contracts traded worth $ 2 billion – the difference. nearly 37% deviation.
However, the situation gradually changed thanks to the superiority of BitMEX. The exchange has traded over $ 16 billion in a day, most of the company's flagship product such as Bitcoin permanent swaps.
BitMEX website traffic is increasing
However, data from Amazon's Alexa website tracker shows that BitMEX has gained more access since the price collapse, with its “global internet participation” ranking increasing from 35,192 from March 12 to 34,532 on March 27. 3.
However, Alexa ranking is not 100% based on the number of views that the site has, so there is a possibility that the deviation between decreasing volume and increased site ranking.
According to AZCoin News
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