• The price of Bitcoin dropped 11.5% from Aug. 16 to Aug. 18, resulting in $900 million worth of long positions being liquidated and causing the price to hit a two-month low.
• There is a common belief that whales and market makers have an edge in predicting significant price shifts allowing them to gain an upper hand over retail traders.
• However, this doesn’t make professional traders immune to substantial losses when the market gets shaky.
Bitcoin Price Drops To A Two-Month Low
The price of Bitcoin fell by 11.5% from Aug. 16 to Aug. 18, resulting in $900 million worth of long positions being liquidated and causing the price to hit a two-month low. Before the drop, many traders expected a breakout in volatility that would push the price upward, but that was obviously not the case.
Did Pro Traders Benefit?
With the substantial liquidations, it’s important to address whether professional traders gained from the price crash. There’s a common belief among cryptocurrency traders that whales and market makers have an edge in predicting significant price shifts and that this allows them to gain the upper hand over retail traders. This notion holds some truth, as advanced quantitative trading software and strategically positioned servers come into play; however, this doesn’t make professional traders immune to substantial financial losses when the market gets shaky. For larger-sized and professional traders, a majority of their positions may be fully hedged; comparing these positions with previous trading days allows for estimations on whether recent movements anticipated a widespread correction in the cryptocurrency market.
Mass Liquidation Event
Bitcoin just saw one of its largest daily liquidations by volume in history; starting at 4:30 PM yesterday, BTC fell 7.5% in 20 minutes erasing $42 billion in market cap during this mass-liquidation event which involved more outflows than during an FTX collapse back in November 2020..
Retail Traders Washed Out?
A massive amount of traders were liquidated as BTC’s value dropped down to $25,300 – so who was primarily affected by such drastic changes? Retail investors are often seen as vulnerable targets due to their lack of knowledge or understanding regarding complex strategies which could protect their capital against sudden drops like what happened last week – but it is difficult to draw conclusions without looking at specific data points such as trader size or type..
Overall it is difficult to conclude whether pro-traders were able benefit from last weeks’ crash – yet we can assume that some did take advantage due its inevitability while many others suffered great losses due its magnitude