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Bitcoin crashes below $10,000, slowing altcoin rally

Nawaz Sulemanji


Bitcoin is back below $10,000, following a 6-minute sell-off that wiped off  $500 from its price.

The sudden sell-off that started at around 3 AM (UTC) on Wednesday—which lead to Bitcoin's price to drop over 5%, from $10,100 to a low of $9,570, just a matter of minutes later.

Then Bitcoin, the number one cryptocurrency by market cap, bounced back nearly 2% in the following 15 minutes. Since the bounceback, it climbed to a high of $9,910—before consolidating to its current price of $9,850.

According to data provider datamish, the ferocious 5% decline liquidated—when trades are closed by the exchange to limit the damage—a staggering $155 million worth of long positions (people betting the price will go up), on the BitMEX futures exchange.

The resulting liquidations dropped open interest–the total number of "open" trading positions on a particular trading pair–on BitMEX's Bitcoin/US dollar contract back below the $1 billion mark, to a low of $940 million.

However, what's different about this sell-off—unlike the last time $10k was breached on Sept 11—is Bitcoin's dominance over altcoins appears to be waning. Previously, Bitcoin's share of the overall crypto market cap would rise as its price dropped, as altcoin prices tended to drop more steeply as a result. But this time things are different.

Since Bitcoin's market dominance hit a high of 71% on Sept 6, it has lost over 3.5%—worth nearly $10 billion—of the total market cap. This is largely due to altcoins like XRP, Ethereum, Litecoin, and even Stellar Lumens' jumping by as much as 30% in one day. But Bitcoin's influence on these coins is still strong.

While prices pumped on XRP et al, when Bitcoin's price fell overnight, those cryptocurrencies also saw price drops.

Alt-season? Not quite.