Bitcoin (BTC) price experienced a brief but severe crash on the cryptocurrency exchange BitMEX late Monday, plummeting to as low as $8,900 while other exchanges maintained prices well above $60,000.
The dramatic dip began at 22:40 UTC and within a mere two minutes, Bitcoin's price dropped to its lowest point since early 2020. However, the rebound was just as quick, with prices rising back to trade around the $67,000 by 22:50 mark as of writing.
During this tumultuous period, Bitcoin's global average price hovered around $67,400, indicating the crash was localized to BitMEX's spot market. Speculations arose on social media, particularly on X (formerly Twitter), with some users suggesting that the crash was triggered by a whale selling over 850 BTC ($55.49 million) on BitMEX, resulting in a notable drop in the XBT/USDT spot pair to $8,900.
In response to the flash crash, BitMEX has since launched an investigation into the incident. The platform acknowledged the unusual activity but assured users that their systems were operating normally, and all funds are secure. The cryptocurrency derivatives exchange identified "aggressive selling behavior involving a very small number of accounts" which deviated widely from expected market ranges.
BitMEX also clarified that the incident affected its BTC-USDT spot market specifically and had no impact on its derivative markets or the index price for its XBT derivatives contracts.
“We launched an investigation as soon as we saw unusual activity on our BTC-USDT Spot Market. All of our systems were operating as normal, but we identified aggressive selling behavior involving a very small number of accounts widely beyond expected market ranges. We can’t comment on any specific behavior of a user or actions taken, and we continue to investigate,” BitMEX added in a statement.
This flash crash has reignited discussions around the volatility of cryptocurrency markets and the impact of large-scale sell orders by institutional investors or "whales." Flash crashes are not uncommon in the crypto space, with Bitcoin and other cryptocurrencies having experienced similar rapid price fluctuations in the past.