Key Points:
The sharp drop in Bitcoin prices on Friday indicates that the era of spot BTC ETFs still experiences volatility, with leverage and liquidity pressures amplifying losses.
The liquidation amount reached $5 billion, and the portfolio margin system failed, highlighting the risks of illiquid collateral assets.
Bitcoin derivatives experts noted that market makers are maintaining a cautious stance amid low liquidity, bankruptcy rumors, and the partial market closure due to the U.S. federal holiday on Monday.
BTC plummeted by $16,700 on Friday, recording a 13.7% retracement in less than eight hours. The price sharply fell to $105,000, erasing 13% of the total open interest in BTC-denominated futures contracts. Despite the significant losses and chain liquidations, analysts stated that such data is not uncommon in BTC's history.
Even without considering the crash during the COVID-19 period—an astonishing 41.1% intraday drop on March 12, 2020—likely due to liquidation issues faced by the leading BTC derivatives exchange BitMEX and a brief 15-minute outage, market data shows that there were still 48 other trading days where BTC experienced deeper retracements.
Market experts pointed out that a recent similar example occurred on November 9, 2022, when BTC faced a 16.1% intraday retracement, dropping to $15,590. This event coincided with the collapse of FTX, as a report revealed that nearly 40% of Alameda Research's assets were tied to FTX's native token, FTT. Sam Bankman-Fried's group subsequently suspended withdrawals and eventually filed for bankruptcy.
Industry analysts noted that since the U.S. introduced the spot BTC exchange-traded fund (ETF) in January 2024, intraday drops of 10% or more have become less frequent. However, considering Bitcoin's four-year historical cycles, it may be premature to claim that volatility has truly eased. Additionally, as trading volumes on decentralized exchanges (DEXs) surge, the market structure itself is continuously evolving.
Significant market events following the ETF listing include a 15.4% intraday drop on August 5, 2024, a 13.3% retracement on March 5, 2024, and a 10.5% decline just two days after the spot ETF debut in January 2024. Regardless of the specific price fluctuations, the $5 billion liquidation scale in BTC futures on Friday indicates that the market may require months or even years to achieve full stability.
The perpetual decentralized exchange Hyperliquid reported that $2.6 billion worth of long positions were forcibly liquidated. Meanwhile, traders on several platforms, including Binance, reported issues with portfolio margin calculations. At the same time, DEX users generally complained about automatic liquidation phenomena, which typically occur when counterparties fail to meet margin requirements.
In fact, even those holding significantly profitable positions saw some positions unilaterally terminated, causing significant issues for traders using portfolio margin rather than isolated risk management. Market experts emphasized that this situation is not necessarily evidence of wrongdoing or fault on the part of the exchanges; it is an inevitable result of using leverage in a relatively illiquid market. Some altcoins plummeted by 40% or more, leading to the collapse of traders' collateral deposits.
During the crash, the trading price of BTC/USDT perpetual futures was about 5% lower than the BTC/USD spot price, and it has yet to recover to pre-event levels. Typically, such a discrepancy would provide market makers with simple arbitrage opportunities, but certain factors seem to be hindering the market from returning to normal.
Industry observers believe that while Friday's drop clearly marked market turmoil, it may also be attributed to thinner liquidity over the weekend, especially as the U.S. bond market is closed for the federal holiday on Monday. Other possible factors include circulating bankruptcy rumors in the market, which may prompt market makers to avoid additional risks.
Therefore, the BTC derivatives market may need a few days to fully assess the extent of the damage, and traders will need time to determine whether the $105,000 level will become a support level or if further retracement is inevitable.
Related: Bitcoin (BTC) ETF continues strong performance in "Uptober," with weekly net inflows reaching $2.71 billion
This article is for general reference only and should not be considered legal or investment advice. The views, thoughts, and opinions expressed in the article are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Original: “Data Proves Bitcoin (BTC) Will Be Fine Even After a 13% Drop in 8 Hours”
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
