On Sunday Bitcoin’s value plummeted by more than £1,000 within minutes and caught traders by surprise, according to CoinDesk.
The world’s largest $BTC plummeted from $12,000 (£9,146) to $10,550 (£8,145) in just 10 minutes, which spooked traders and has sent shockwaves through the markets.
The price of Bitcoin (BTC) and Ethereum’s Ether (ETH) plummeted by 13% and 21% respectively, which liquidated more than $1bn of future contracts.
This comes as the market was heavily swayed to longs or buyers, and typically cryptocurrency tends to fall over the weekend. Mass liquidations are seen during weekends as the liquidity falls due to fewer active traders within the market.
Once a long contract is liquidated, it can force the buyer to market sell, which causes pressure. And Bitcoin and Ether falls rapidly.
Over the last five months there have been several mass liquidations, on 11 May Bitcoin fell to $8,100 which sparked mass liquidations.
The worst happened on 13 March, which was called “Black Thursday” which saw $1bn of liquidations happen.