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Bitmex Maintenance Drama Thread:
My intention in writing this thread is to elucidate the most salient points regarding recent PA and the #Bitmex drama. There has been a lot of noise in the past 24 hours, hopefully this will help to cut through it all.
My intention in writing this thread is to elucidate the most salient points regarding recent PA and the #Bitmex drama. There has been a lot of noise in the past 24 hours, hopefully this will help to cut through it all.
As far as I'm concerned there are 2 primary potential explanations for the pump.
The first of course being manipulation.
There were a number of suspect activities that occurred prior to the event (hidden buy walls maintaining/increasing price, $100m of USDT moved to exchanges).
The first of course being manipulation.
There were a number of suspect activities that occurred prior to the event (hidden buy walls maintaining/increasing price, $100m of USDT moved to exchanges).
Bitmex maintenance would also be the best time to manipulate as 40% of liquidity is/was absent. Though it cannot be proven, it would certainly make a lot of sense for this to have been manipulation as it would have been extraordinarily profitable.
It's also worth noting the fact that Bitmex is the ideal exchange to have done this with. Not just because it accounts for the majority of volume, but also because of the fact that many positions are highly leveraged and hence easily liquidated.
The other possible explanation is an API/bot error.
If one had been holding a hedged short using Bitfinex spot and Bitmex futures, when the maintenance occurred, bot may have reported a 0 balance (Bitmex) or API error and responded by covering short with a huge market buy order.
If one had been holding a hedged short using Bitfinex spot and Bitmex futures, when the maintenance occurred, bot may have reported a 0 balance (Bitmex) or API error and responded by covering short with a huge market buy order.
Credit to @BTCVIX for this observation
https://twitter.com/BTCVIX/status/1032073662566944769. Evidence for this being the case would be the fact that the pump was near instantaneous, and (as far as I’m aware) appeared to be sparked by a single large order.
Haven’t checked order flow at the moment this occurred. Might do so in the future, will update if I do and report as to whether it affirms or denies the API thesis. In any case, there’s no way to be certain.
Honestly, I don’t really have a strong opinion as to which of the 2 scenarios best describes what occurred, it’s hard to give a probabilistic analysis either given the irregularity of this occurrence. In any case, we can discuss the implications of the event.
As noted by @Crypto_Macro, the past 24 hours has been a big win for those who traded short term long, but a loss for investors. Though not stated explicitly, this is basically addressing the fact that recent events have exposed the fragile nature of the market, and further
decreased the (already very minimal) chance that we’ll see ETF approval in the near future. If it was the result of manipulation; it’s fairly self evident as to why that’d reduce the probability of ETF approval.
Even if it was the result of a simple API error, it still shows how hyper-reliant the market is on a single unregulated exchange. Irrespective of the impetus, the event has quite clearly revealed many flaws in the current market, and does not bode well for near term ETF approval.
Though this hasn't been overly in-depth or descriptive, these are the key takeaways as far as I'm concerned.
If there's anything I missed, please leave a comment and I'll add it to the thread.
RT if you think this might be helpful to others!
If there's anything I missed, please leave a comment and I'll add it to the thread.
RT if you think this might be helpful to others!
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