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People were taken aback by the recent bitcoin drop, as market developments had been encouraging. After all, El Salvador has made Bitcoin legal tender. Aside from that, hodlers planned to buy bitcoins in honor of El Salvador’s Bitcoin Day.
It was a bullish run, and BTC was closing in on $53,000 USD, then it abruptly turned negative, dropping by $10,000 USD in a couple of hours. Analytics from Crypto Quant, a crypto data firm, shows “the volume of Long Liquidation in less than 1 hour can confirm that this price fluctuation was majorly Futures Market-driven.”
Alameda Research CEO Sam Trabucco agreed with this notion. In a tweet, he said that “when crypto rallied a ton to $65k pretty quickly, futures were at high premia, and open interest of all the important contracts was up.”
Lark Davis, a bitcoin expert, also turned to Twitter to offer his thoughts on the issue. He believes it’s because the bitcoin market is very leveraged, and he’s not the only one.