Bitcoin is inching closer to break above a major resistance level of $12,000 after its price added approximately $500 in no time. That unexpected move liquidated an enormous amount of shorts on cryptocurrency derivatives behemoth BitMEX.
Trading and gambling
BitMEX, which allows you to bet on Bitcoin’s future price action with up to 1:100 leverage, draws a lot of criticism for turning cryptocurrency trading into gambling. The issue has been recently brought up by famous Bitcoin naysayer Nouriel Roubini, who accused the exchange’s CEO Arthur Hayes of emptying the pockets of his risk-taking users.
If there’s high-leveraged trading involved, traders can get instantly liquidated on even tiny moves. Thus, this 5 percent uptick resulted in a staggering $44 mln loss for those who shorted BTC.
Liquidated short on XBTUSD: Buy 10,000,000 @ 11750.5 🏅🏆💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯 ~ Only casuals get liquidated— REKT (@BitmexRekt) July 8, 2019
Another bullish move
As it usually happens with Bitcoin, there was no clear precursor to this sudden price increase. The network’s hashrate hit its new ATH on July 7, according to data provided by Blockchain.info. That means that new mining hardware is coming into play while competition between miners continues to grow.
However, trading expert Alex Krüger earlier claimed that hash rate doesn’t serve as a harbinger of a future bullish move. In fact, the situation is the opposite – it usually follows the price of BTC.