Coincidence? Bitcoin price pumps while Bitfinex is doing maintenance
The Bitcoin price rose by up to 4% within a few minutes. Bitfinex went offline today for maintenance work just before the pump started. But why should a platform failure lead to such a step? Let's take a look at what this means for Bitcoin price in the coming days.
Bitcoin price peaks after the maintenance of Bitfinex
The Bitcoin price has been bullish throughout the year so far 2020 and has been since the beginning of the year has increased by 30% and has reached the critical mark of 10. 000 dollar exceeded.
But after the Bitcoin price this weekend the 10. 000 Had reached dollar, BTC quickly fell back under the psychological FOMO wave. Last night's daily candle closed as a bearish, which typically signals that bearish price action will follow.
However, the candlestick could have been a fake move that should lead traders to take a short position just so that these shorts are extinguished during today's Bitfinex maintenance. The idea is that traders who anticipate further downward movements would have opened short positions – positions that they cannot close at the moment because the platform is due to the scheduled maintenance is not available. Shortly after Bitfinex went offline, the Bitcoin price started to shoot up and easily broke the $ 10. 000.
thank you, i just lost all my money
– VaderPaul4 (@awesome 1273) February 11, 2020
Traders on Bitfinex use leverage to align their trades by a factor of up to 3.3x. When the price rises, shorts are either liquidated or traders close their shorts to keep losses to a minimum. However, when the shorts are closed, it acts as a buy order for Bitcoin, causing the price of Bitcoin to go higher and higher.
While a short squeeze is in progress, there is a fear of a possible long squeeze. If the bulls are unable to completely push bearish traders out of their positions, retaliation could result in a violent long squeeze in the coming days.
Proof of text: newsbtc