Bitcoin, the top cryptocurrency by market capitalization, experienced more than a five percent drop on Aug. 28 with $144 mln longs being liquidated on the BitMEX exchange.
According to Dave Balter of Flipside Crypto, this sudden sell-off might have been caused by the expiration of CME’s Bitcoin futures contracts.
From our end, it looks like it was a sell-off to cash settle futures that are coming due on Friday for BTC,” Balter told Fortune.
Nearly 50 percent of the open interest for Bitcoin futures contracts is set to expire on Aug. 30, which was definitely a harbinger of more price volatility.
Meanwhile, Arca CIO Jeff Dorman believes that the most recent downturn was caused by a double-whammy of CME futures expiration and low trading volumes. When there is low liquidity in the market, it’s much easier for whales to pull all the strings.
Volumes are low and it takes very little to move markets right now, and you have big futures/options expirations coming up at the end of the week.
Dorman claims there is not enough bullish sentiment to keep the BTC price afloat.
However, the Chicago-based exchange continues to set new records with its Bitcoin futures product. As reported by U.Today, the number of contracts this month has risen by a whopping 132 percent since last year, and CME doesn’t plan to close up shop anytime soon.
In the meantime, ICE-backed exchange Bakkt has announced the launch of its custody solution prior to rolling out physically-settled Bitcoin futures.