Black Thursday Has Destroyed BitMEX Bitcoin Open Interest, Hits Historical Lows

Tony "The Bull" Severino

4 years ago

2 mins read

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The cryptocurrency margin trading platform that once enjoyed the crown across the industry, has just reached a historical low on the platform’s now-notorious Bitcoin open interest.

According to data, the once industry leader has been on a downward trajectory ever since the Black Thursday collapse that not only crushed Bitcoin prices, but may have put a permanent stain on the reputation of the top dog.

BitMEX Open Interest Drops By 68% Data Shows, Is the King of Bitcoin Margin Trading In Trouble?

The leading cryptocurrency by market cap, Bitcoin, was trading well above $10,000 at the start of the year, but failed to incite further FOMO, and the price reversed.

On the way down, coronavirus fears spun out of control, causing a historical selloff across all assets on a day now forever referred to as Black Thursday.

Stock markets collapsed, safe-haven assets like gold and silver suffered, and cryptocurrencies were decimated. Bitcoin fell over 40% in 24 hours, while the rest of the market tanked by over 70% in many cases, reaching new bear market lows.

On the way down, things quickly got dangerous for Bitcoin, as BitMEX essentially could no longer control its liquidation engine, which caused a cascade effect of longs being squeezed and the price collapsing further.

It wasn’t until BitMEX was taken offline, that prices on spot platform began to rebound. The impact of BitMEX was so apparent at this point, that it left a bad taste in trader’s mouths, and the platform quickly became a ghost town.

It’s even caused a distinct distrust in cryptocurrency exchanges in general, which has prompted more crypto investors to move their BTC off exchanges and into cold storage.

This has resulted in a BitMEX’s open interest – a metric depicting how many open positions are currently on the line and how much BTC and cash equivalent value is wagered – hitting historical lows, according to data from Arcane Research.

Levels fell to the lowest since October 2018, just one month before Bitcoin’s drop to its bear market bottom at $3,200. Worse yet for BitMEX, Arcane’s analysis “reveals a grim reality for the platform”

“Since the all-time high OI of 147,810 BTC, the open interest has now declined by 68.5% to 46,610 BTC,” a weekly report reads.

BitMEX has earned itself a negative reputation in the past due to order submission errors, a probe from the CFTC, and a public spat with economist Nouriel Roubini. But this may be the last straw for traders, who will be forced to find greener pastures such as SimpleFX, FTX, and other popular margin trading platforms suddenly picking up steam as a result of the void left behind by BitMEX.

Featured image from Pixabay

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

Tony is also celebrated for his literary contributions to the field. He is the author of the highest-rated Crypto Trading Journal on Amazon.com, a testament to his ability to communicate complex trading concepts in an accessible manner. This journal is widely regarded as an essential tool for traders aiming to track their progress and refine their strategies.

Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.