BTC fell below 10,000, 1.5 billion evaporated overnight, is CME the culprit?

At around 2 a.m. today, the price of Bitcoin on BitMEX and other exchanges suddenly dropped from around $10,200 to below $9,600, reaching a low of $9,530, a drop of more than $600 in just a few minutes, a drop of 7%. Currently, Bitcoin is trading at $9,695, down 4% in 24 hours.

(Source: TradingView, the time shown in the chart is US time)

This morning, the market is still in the green. The onion market shows that 91 of the top 100 currencies by market value fell, only 9 rose, and 51 currencies fell by more than 10%.

ETH's decline was also severe, falling from around $190 to around $170, a 24-hour drop of 7%. ETH has fallen below its August low and has fallen to its lowest level since mid-May.

Several mainstream currencies also experienced sharp declines, with XRP falling 4% in 24 hours and EOS falling to $3.1 at one point, a 7% drop in 24 hours.

In addition, the Xiaocong APP market shows that the three major platform currencies have fallen by more than 10% in the past 24 hours. BNB once fell below $23, temporarily reported at $23.04, and the 24-hour decline widened to 10.11%; HT approached the $4 mark, temporarily reported at $4.09, and fell 10.86% in 24 hours; OKB temporarily reported at $2.57, and fell 10.34% in 24 hours.

Due to the sharp decline in the cryptocurrency market, the amount of liquidation in the past 24 hours was nearly 400 million yuan. According to Coin data, in the past 24 hours, a total of 55.46 million USDT (about 396 million yuan) of liquidation orders were added. Among them, Bitcoin added 201,000 liquidation orders, about 2055 BTC.

(Source: Coin, Time: 08:48, August 29)

In addition, in the past 6 hours, BitMex's long orders were liquidated by 171 million US dollars, about 1.19 billion yuan. Adding the 396 million shown by Coin, about 1.5 billion yuan evaporated overnight.

Regarding BTC's sharp drop in the early morning, several crypto analysts believe that the expiration of Chicago Mercantile Exchange (CME) Bitcoin futures on Friday is the main reason for the sharp drop.

Cryptocurrency analyst Joseph Young tweeted that Bitcoin is on a downward trend after failing to breakout. Some analysts said that the closing of CME Bitcoin futures was the main factor in the big drop, which makes the most sense to me because CME accounts for a much larger proportion of Bitcoin trading volume than investors expect.

Skew Research said that about 50% of open interest on CME will expire this week (Friday).

Since the beginning of August, the price of Bitcoin has attempted to break through the support range of $9,800 to $10,200 several times in three weeks, but has failed, which may show that the short-term upward trend of Bitcoin is weak.

However, the market still has no specific feedback on the reasons for this sharp drop.

But the upcoming Bakkt Bitcoin futures are still worth paying attention to. Bakkt’s official Twitter account stated that Bakkt Warehouse will begin providing secure Bitcoin storage services on September 6, in preparation for the launch of Bakkt Bitcoin daily and monthly futures on September 23.

Therefore, it is possible that funds are flowing in the Bitcoin futures market, and funds will choose to jump out of exchanges such as CME and prepare to enter Bakkt. Perhaps this is one of the reasons for the short-term decline in Bitcoin.

The Forexlive article analysis shows that the current Bitcoin price is still higher than the lows in July and August, and $9,000 may become the new support level for Bitcoin.

However, there are also views that this sharp drop is a good opportunity to enter the market.