BTC prices fell 6 percent to $8,620 within five minutes on Sunday shattering short-term bitcoin price predictions. The price decline affected all major trading platforms leading to fears that current prices might be overinflated.
The bitcoin market downturn had a domino effect on 20 of the most popular digital currencies. The prime digital currency traded at just over $9,000 before the semi-momentous plunge. It was the steepest decline this year, but the bulls appear to be slowly regaining control.
So, What Caused The Sudden Price Dip?
Liquidation of overleveraged long positions is believed to have caused the bloodbath. Bitcoin prices had risen by over 20 percent in the preceding weeks. The mini-rally was technically bound to hit a snag due to price inflation.
Liquidation typically occurs when a sudden plummet in prices dissolves long overleveraged market positions. Once the liquidation limit is reached, traders are forced to sell the digital assets put up as collateral.
About $110 million was liquidated on BitMEX alone during the…