If any day on the crypto markets could be defined as a massacre, then yesterday was that day, with all major cryptocurrencies declining more than 40% and Bitcoin (BTC) declining from $8,000 to as low as $3,850 in a little over 24 hours.
Out of all the crypto exchanges, by far the most violent action occurred on BitMEX, which liquidated $1.1 billion of positions in just 24 hours. Essentially, anyone who was going long was rekt. Indeed, the BitMEX rekt twitter was having a field day.
After many continuous hours of traders losing large amounts of money, some divine mercy occurred, and BitMEX went offline for about 45 minutes since its system was overwhelmed.
Notably, the price of Bitcoin (BTC) recovered by over $1,000 as soon as BitMEX went offline, suggesting that the mass liquidation of long positions on BitMEX was applying significant downward pressure to the spot market.
Aside from BitMEX, the Gemini exchange went offline as well, and Deribit lost its entire insurance fund since the liquidations occurred too fast to handle.
All of that being said, certainly there is someone out there who successfully shorted the Bitcoin (BTC) market on BitMEX down to $3,850 last night, and right about now they’re probably buying their entire family yellow Lambos.