Wow. In the span of two minutes, Bitcoin (BTC) spiked $300 from the $9,920 to slightly above $10,200. The leading cryptocurrency proceeded to drop by $200 in the five minutes that followed this rally.
According to Skew.com, a crypto derivatives tracker, more than $3 million worth of BTC positions on BitMEX were liquidated during this move. Most of the liquidations were sell-side liquidations, suggesting that many traders were short.
At current, most Bitcoin and Ethereum futures markets are printing negative funding rates. This corroborates the sentiment that many traders are currently short on the cryptocurrencies.
Bitcoin May Be Falling Due to the Stock Market
Bitcoin’s inability to hold the low-$10,000s price region seems to be related to weakness in the stock market.
The S&P 500 and other stock indices crashed over 2.5% during Tuesday’s trading session. This comes after the stock market printed a clear top last week.
The U.S. dollar is also rallying.
Further weakness in the S&P 500 and strength in the U.S. dollar is likely to suppress Bitcoin, especially as gold also tapers lower.