Bitcoin crashed by over $500 in just a five minute period as it fell from $8,000 to hit a low of $7,400 today during a violent 30-minute sell-off. It has since bounced back up to $7,450. The price drop came moments before Facebook CEO Mark Zuckerberg’s testimony to Congress over Facebook’s Libra.
This is the second eye-watering drop for the number one cryptocurrency by market cap in recent weeks. Last month, the price of Bitcoin dropped from $10,000 to $8,000.
And this has added up to a poor performance over the last six months. With today's drop, the price of Bitcoin is now down over 45% from its June high of just under $14,000.
Today's crash impacted heavily on those betting long on Bitcoin. During the sell-off, $200 million worth of bullish trader positions were liquidated on the BitMEX futures exchange. The price dropped in just five minutes on BitMEX, before spreading across other exchanges over the next thirty minutes. This led to some commentators arguing that BitMEX was the cause of the dump.
The drop has, however, resulted in potentially high trading volume for the Bakkt futures exchange. It has currently seen a record high of 296 BTC ($2.2 million) in trading volume today, beating its old highs of 224 contracts that were traded on 11th October.