BitMEX Investigating Unusual Flash Crash That Drove Bitcoin Price Down To $8,900

That massive red candlestick showing Bitcoin crashing to as low as $8,900 on the crypto exchange and derivatives trading platform BitMEX was not a nightmare.

BitMEX is investigating the “unusual activity” on its $BTC/Tether spot market that temporarily brought down Bitcoin prices by 80%.

Bitcoin’s Flash Crash On BitMEX

Bitcoin ($BTC) saw a sudden and huge flash crash on BitMEX late Monday. The fall started at 22:40 UTC, and the $BTC price had dropped to $8,900 within minutes — the lowest level since early 2020. The recovery was equally swift, with prices recovering above $67,000 ten minutes after the abrupt drop.

BitMEX issued a statement acknowledging the unusual activity and assuring customers that their funds were safe.

Moreover, the exchange added that the incident did not affect its “billion-dollar derivatives markets”. BitMEX also reassured users that its trading platform is operating normally, with deposits and withdrawals being processed as usual.

Notably, Bitcoin’s global average price remained steadily above $67,000 during the whipsawing episode on BitMEX’s spot market. This discrepancy has sparked speculations among crypto market watchers about the cause of the flash crash.

Whale Sell-Off Triggered Crash?

Members of the crypto Twitter community have suggested that a massive sell order or whale selling triggered the price crash.

According to pseudonymous crypto researcher Syq, the unknown whale placed a market sell order of more than 850 $BTC ($55 million) on BitMEX, pushing the XBT/$USDT spot pair to $8,900.

The researcher also revealed that BitMEX had disabled the withdrawals from some accounts. In response to the blocked accounts, BitMEX revealed that it had temporarily disabled withdrawals for only a bunch of accounts involved in the investigation.

Bitcoin is currently trading for $63,017, according to CoinGecko data.