A sudden spike in Bitcoin’s price on Binance.US has left traders baffled. Discover the reasons behind this unusual occurrence and its impact on the cryptocurrency market.
Bitcoin Price Soars to $138K
In a remarkable turn of events, Bitcoin witnessed a momentary surge to an astonishing $138,000 on Binance.US, one of the leading crypto exchanges. The price hike, which occurred on the btc/tether trading pair, was met with both surprise and confusion within the cryptocurrency community. While the surge lasted only a few seconds before returning to normal, its underlying cause remains a subject of intense speculation.
During the early hours of the day at 6:50 a.m. UTC, the price of Bitcoin experienced an unprecedented spike on Binance.US. Traders and investors were taken aback as the cryptocurrency momentarily reached an exorbitant value of $138,000. This sudden surge, however, was short-lived, as prices swiftly reverted to align with the rest of the Bitcoin spot markets. Nevertheless, the magnitude of the price wick and its rapid reversal raised questions about the factors at play.
The Unexpected Surge
Contrary to initial assumptions, the surge was unlikely to have been the result of a trader willingly paying a staggering 450% premium for Bitcoin. At the time of the incident, Bitcoin’s average price stood just above $29,000, indicating that such an exorbitant valuation was inconceivable. This realization shifted the focus towards other potential causes, leading to a closer examination of the btc/tether trading pair on Binance.US.
Reports indicate that the btc/tether trading pair on Binance.US experienced a significant drop in liquidity, which ultimately contributed to the unusual price movement.
A 76% Drop in Market Depth on Binance.US
In recent months, Binance.US has witnessed a considerable decline in market depth, as highlighted in a Kaiko report. Compared to May, the market depth on the exchange has diminished by a staggering 76%. This decline suggests that market makers and traders have withdrawn from Binance.US, seeking alternative platforms with more favorable liquidity conditions.
While the surge may have left many perplexed, a combination of low liquidity on the btc/tether trading pair and diminished market depth on Binance.US offers a plausible explanation. Traders and investors must remain vigilant in understanding the intricacies of the market to navigate such unusual events effectively.
