BTC rate on Bitfinex jumps to $56 000

A sharp rise in quotations caused the liquidation of traders’ positions

03.05.2023 - 08:45

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What’s new? Bitcoin’s price on the Bitfinex crypto exchange briefly rose to $56 000. Reaching the mark was recorded on May 2 from 14:24 to 14:26 UTC. The trading volume on the BTC-PERP market at that time increased to 322 BTC (about $9,1 million), which was about a quarter of the daily figure for this position. The surge in the rate caused mass liquidations of traders’ open positions on the platform. According to Bitfinex CTO Paolo Ardoino, the reason for the incident was not an error in the system, but low liquidity at a certain point in time.

Low liquidity at that moment in time. But system worked as expected. Matching engine handled all orders correctly. — Paolo Ardoino 🍐 (@paoloardoino) May 2, 2023

What else is known? On other exchanges, bitcoin gained about 2,5% at this time. The rise was driven by investors’ and traders’ reactions to a more than 30% drop in shares of two US banks, Pacwest (PACW) and Western Alliance (WAL), amid renewed concerns about the health of the US banking system.

As of May 3, 07:45 UTC, bitcoin is trading on Binance at $28 648, having added 2,14% per day.

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On March 13, the bitcoin rate paired with USDC on Binance rose to $50 000. Analysts Colin Wu suggested that the subsequent return of the asset price to normal levels of $22 200 was due to insufficient liquidity.

And on January 31, the rate of BTC USD on crypto exchanges in Nigeria rose to $48 000. The growth in demand for the asset occurred against the backdrop of restrictions on cash withdrawals.

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