Over $28 million BitMEX XBT contracts liquidated in the past 24 hours as analysts point to Coinbase Pro shutting down as the root cause.
Over $27 million worth of XBT contracts liquidated
In a bizarre 20 minutes on BitMEX, the largest Bitcoin futures contract exchange, witnessed the XBT price spike to $9,486 USD before crashing to $9,100 support area. The wild move in Bitcoin price saw a huge number of traders burn their bets with close to $28 million worth of XBT contracts liquidated.
The spike to $9,400, wiped off over $3.54 million short contracts on the exchange before a short “malfunction” in BitMEX saw the price dip to $9,100 liquidating over $16.36 million long contracts.
According to a number of analysts the liquidation was largely a factor of the recent maintenance shutdown of Coinbase Pro, which holds over 52% of the total weighting index used by BitMEX.
[status] Scheduled (Jan 30, 2020, 09:00 PST): Coinbase Pro will go offline (user interface and APIs) shortly at 9am PT for scheduled maintenance with trading in all markets expected paused until approximately 10:30am PT. https://t.co/gpHRFnfbmy
— Coinbase Pro (@CoinbasePro) January 30, 2020
Looking at the composite of the weighting index, Coinbase Pro (GDAX) holds 52. 30% of the weighting, Kraken holds 23.46%, and Bitstamp exchange holding 10% of the weightage. Could this be the cause of the massive 15 minute liquidations on XBT contracts?
BitMEX to bare blame for liquidations?
The price of Bitcoin has been relatively stable and quick spikes at the one witnessed on Thursday is an outlier leading to the question, is this another normal market move or is was the market compromised?
So someone had a plan to buy bitcoin higher today and Bitmex fkd it up, or we should blame Coinbase?
Good thing the day isn't over pic.twitter.com/8xX8DqbR7g
— ₿it₿it (@BitBitCrypto) January 30, 2020
Coinbase Pro shutting down for maintenance, holding over half of the weighting, was bound to affect the index in some way. According to a crypto trader, BitMEX not disclosing how they would deal with the issue of Coinbase Pro shutting down and the effects on its weighting raises suspicion on the exchange.
Bitmex index price has a 52.3% weightage on Coinbase Pro (GDAX) and they are gonna go offline temporarily.
Didnt see any announcement from @BitMEXdotcom on how they're gonna handle this. https://t.co/eXZO1yaf78 pic.twitter.com/ZJZdfb6VPI
— CEO of Gold (@cryptoSqueeze) January 30, 2020
Coinbase Pro is once again online with Bitcoin trading at $9,536 USD across various top crypto exchanges.