Bitcoin Day horror show: 375,000 traders liquidated during brutal crypto-correction
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It was a “Bitcoin day” that many would rather forget.
Just as Bitcoiners around the world were set to celebrate El Salvador’s historic law that makes BTC legal tender taking effect, a brutal sell-off occurred shortly after midnight (Sydney time).
— Mr. Whale (@CryptoWhale) September 7, 2021
The correction wiped out nearly 375,000 leveraged positions with a total face value of US$3.67 billion, according to ByBt.com.
BTC dropped from just over US$50,000 to US$45,299 in the space of 45 minutes to 1.14am AEST, with altcoins falling even more.
At 11.10am, BTC was trading at US$47,002, down 10.2 per cent from 24 hours ago, and Ethereum was changing hands at US$3,457, down 11.2 per cent.
More than 60 of the top 100 coins were down by double-digits, with the overall market down 10.8 per cent to US$2.18 trillion.
The correction came about two hours after El Salvadoran President Nayib Bukele tweeted that the country’s rollout of Bitcoin wallets had hit a glitch, although it wasn’t clear whether there was any connection.
Often crypto markets take “buy the rumour, sell the news” to an extreme degree.
If you're wondering what happened to #bitcoin right about now, fat liquidations is the answer. A lot of people trading leverage excepted $btc to rise due to the El Salvador news, and then when the price didn't, they got liquidated, which caused the price to dip more…etc pic.twitter.com/eXFF2mD9tr
— CoinTakes (@cointakes) September 7, 2021
Bukele – whose primary audience sometimes seems to be Bitcoiners rather than his own citizens – tweeted during the selloff that the country was “buying the dip” and had purchased 150 BTC, in addition to the 400 it bought yesterday.
A number of crypto traders reported having trouble with centralised exchanges during the correction.
Gemini tweeted at 4.25am AEST that the exchange was “back up” while Coinbase posted at 1.28am that it was “aware transactions are currently delayed or cancelled at elevated rates and our apps may be experiencing errors.”
Kraken and Binance seemed to have had experienced issues as well, according to social media posts.
Ok so US Market in a nut shell
coinbase – 404 on order entry + latent market data
Gemini – lagged on market data then shut down
Kraken – order entry failed
FTX US – seems like aggressive rate limiting but mostly worked
Binance US – full out broken. not possible to get order entry
— ./i_am_nomad (@IamNomad) September 7, 2021
Four of the top 100 coins resisted the correction and were still up at lunchtime, compared to 24 hours ago.
Solana was trading at US$179, down from the all-time high of US$193 it set yesterday afternoon, but up 3.6 per cent from where it was around noon on Tuesday.
Quant and Bitfinex’s LEO Token were also up a bit over four per cent as well.
The biggest gainer by far however was Near Protocol, which had risen more than 45 per cent to hit an all-time high of US$9.17 around noon.
The No. 48 crypto, Near is a high-performance blockchain platform. Other than this Medium article spruiking the blockchain, there didn’t appear to be any obvious catalyst for the pump. But layer 1 blockchains such as Solana have been in vogue lately as high fees continue to plague Ethereum.
According to DeFi Lama, layer 2 Ethereum scaling solution Optimism has only been able to attract US$115 million in total value locked (TVL) in smart contracts on its platform, while recently launched rival Arbitrum is at US$15 million TVL. Solana meanwhile is No. 4 at US$6 billion.