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Cryptocurrencies are working their way back Monday after Sunday’s big flash crash.
A bullish run for bitcoin past $12,131 was interrupted Sunday, as bitcoin endured a sudden drop, losing over $1,400 within a brief period of time.
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“The market had rallied strongly from $9,000 to over $12,000,” said Rupert Douglas, head of institutional sales for crypto brokerage Koine. “The reaction down was purely to shake out the weak longs who had got in at the higher levels,” Douglas added.
Indeed, hourly liquidations spiked to over $147 million on derivatives platform BitMEX on Sunday. As the price began trending downward, derivatives traders going long saw their positions automatically sold, the crypto equivalent of a margin call, on the Seychelles-based exchange.
The highest BitMEX liquidation during the session was a $10 million long position. “There were a lot of high-levered long day traders who were liquidated and are licking their wounds as a result,” said John Willock, CEO of digital asset liquidity provider Tritum.
The amount of spot bitcoin trading on Coinbase Sunday was higher than normal, at $318 million. In fact, Sunday was the second-highest volume day in the past month, following a $446 million day on July 27.
“The rest of the market seems to have had a big appetite to accumulate bitcoin at $1,000 off, now working its way back to $12,000 and beyond,” Willock added. “I see it as a stumble and we’re back on track.”
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Bitcoin is still 5.8% off of its Sunday high, while ether is down 5%.
The second-largest cryptocurrency by market capitalization, ether (ETH), was up Monday trading around $394 and climbing 4.4% in 24 hours as of 20:00 UTC (4:00 p.m. ET).
Ether was not spared Sunday’s flash crash, falling as low as $325 before recovering. Some traders claim they took advantage of the dip. “We had expected ETH to fall back to the low $300s and accumulated there,” said Jack Tan, managing partner of Taiwan-based quantitative trading firm Kronos Research.
Karl Samsen, vice president of capital markets for trading firm Global Digital Assets, told CoinDesk ether is separating itself from bitcoin and is actually helping push the alternative cryptocurrency, or altcoin, market. “Bitcoin is rebalancing itself, as it was the previous leader,” Samsen said. “Ether is tearing up the market, and it’s bringing alts up with it. We’re still very bullish on mid- to low-market-cap alts.”
Read More: Nearly $100M in Bitcoin Moved to Ethereum in July, Led by Retail Traders
Digital assets on the CoinDesk 20 are all in the green Monday. Notable winners as of 20:00 UTC (4:00 p.m. ET):
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