The bitcoin [BTC] quarterly futures hit a high just shy of $100,000 – $99,964 USD on among the leading cryptocurrency exchange, Binance. While sudden moves like these aren’t new, it had been forgotten due to the slow, sideways moving price barren of volatility.
With over a billion dollars worth of positions liquidated within a minor $1,400 USD move by Bitcoin, volatility is back. While the move could be over for now, more might be on its way. At the reporting time, bitcoin was trading at $11,300 USD and had a market cap of $208 Bln; but while this drop happened some exchanges, especially Binance went a little haywire.
From the above, it can be often seen that the quarterly futures, which remains open hit a high of $99,964 USD; the reason for this was automatic trading or trading using bots and algos. On the exchange, slippage seems to possess played a serious role within this weird turn of events.
The wick had a complete volume of $2.5 Mln as at the time of reporting, however, more will accrue as the wick gets erased and charts are rewritten by Binance. CZ, the CEO, and co-founder of Binance tweeted :
“Another day in crypto. We do have price band protection, but a user’s algo went ballistic and sent multiple orders to realize this. We’ll likely need to adjust this chart a bit in order that it’s readable within the future.”
While this wick didn’t technically cause any issues like auto-deleveraging [ADL] for bitcoin futures, it did so, for Ethereum [ETH] and other altcoins. XRP and TRX perpetual contacts also suffered wicks that dipped as low as 22% and 7%, respectively.
This slippage does cause tons of trades to urge auto-deleveraged, while ADL is put in an attempt to stop liquidations and help new users, it also prevents users from keeping their trades open.
The drop seen today wasn’t the largest drop, however, an identical ADL scenario happened earlier in March when the price of the leading cryptocurrency Bitcoin [BTC] dropped 50% in just a few hours. Binance tweeted that “Binance Futures Insurance Fund used over $6,000,000+ within the past 24 hours reducing ADL’s”. They also made sure to mention that ought to the fund deplete, more would be injected to form sure users are secure.