The former head of BitMEX attributed the decline in the price of the asset to increased selling pressure amid the withdrawal of 24 500 BTC to the market by the investment company Purpose

Arthur Hayes explained the bitcoin rate fall to local low

21.06.2022 - 15:45

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2 min

What’s new? The co-founder and former head of the cryptocurrency exchange BitMEX, Arthur Hayes, shared his assumption as to what may have influenced bitcoin to fall to a local low of $17 600 on June 18. He noted that by the close of the trading session on June 17, the bitcoin-ETF of investment firm Purpose brought 24 500 BTC to the exchange, leading to increased selling pressure. That, Hayes said, could have led to the launch of stop-loss orders, which automatically sell assets when quotations fall to a certain level.

What else does Hayes say? He explained that over the weekend, as the fiat exchanges closed, the price of the first cryptocurrency fell to a low of $17 600 with high trading volume, almost 20% compared to Friday. Hayes suggested that “a forced seller triggered a run on stops,” instructions to open positions when the asset rises to a certain point. He added that BTC quickly regained a key support level of $20 000 after closing most selling positions.

“Given the poor state of risk management by cryptocurrency lenders and over generous lending terms, expect more pockets of forced selling of BTC and ETH,” — Hayes wrote.

In mid-June, Hayes named critical support levels for bitcoin and Ethereum exchange rates. In his opinion, these are the $20 000 and $1 000 marks, respectively. Hayes believes that after these levels are broken through, we can expect massive sell pressure in the spot markets as dealers hedge their bets.

Author:

Tatiana Darda Tatiana Darda

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