Bitcoin has seen quite the bout of volatility over the past hour or so.
After trading at $9,700 for most of Monday, the cryptocurrency suddenly surged as high as $9,900 on the influx of a buying volume. But once it hit $9,900 the trend quickly reversed, with the asset plunging nearly $400 in 10 minutes.
Analysts liken such a candle to the lightsaber of Darth Maul, the Star Wars villain whose weapon produced lasers from two sides.
Due to the volatility, many millions worth of leveraged positions were liquidated according to data shared by the Skew.com crypto derivatives platform.
The company reported that in the past hour alone, more than $13 million worth of long and short positions in BitMEX’s Bitcoin market has been liquidated.
For BitMEX’s Ethereum market, the value of contracts liquidated is $400,000. This is rather low considering that Ethereum fell 10% from the highs to the lows, but it may make sense as BitMEX’s ETH market is relatively small compared to its BTC market.
What’s Next for Bitcoin?
Although volatility still persists after this moves, Bitcoin is attempting to stabilize where it started this Darth Maul candle. This may suggest that the outlook that analysts had prior to this move is still valid.
A prominent cryptocurrency trader shared the chart below, noting how in rallying to $9,900 but failing to break through, BTC is leaning bearish.
“Mapped out and followed the plan sweeping the local highs – squeezed out shorts. Shorted eth & btc – just waiting to see if it starts grinding down. Alot of OI built for a $200 push and wiped out,” he wrote on the matter.
But as normal, analysts cannot fully agree on what comes next.
A notable cryptocurrency chartist noted how Bitcoin’s recent price action, with the Darth Maul candle and the capitulation drop last week looks eerily similar to the 2019 bottom in the $3,000s. What followed that bottom, as we now know, was a 300% rally to $14,000 in the months that followed.
Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt $15 Million Wiped Out on BitMEX as Bitcoin Prints $400 "Darth Maul" Candle