Text | Edited by Xiao Pai | Produced by Bi Tongtong | PANews
I thought it was "Black Monday", but I didn't expect it to be "Black Week".
Bitcoin, which had been falling for a week, suddenly began to fall in a waterfall at 18:00 on March 12. Within 30 minutes, it blew $2,000, dropped from $7,343 to $5,500, and then rebounded to more than $6,000. The plot didn’t end there. Investors who stayed up all night were still asleep, and Bitcoin fell from $6,000 to a minimum of $3,800 within two hours.
Under the sudden waterfall of market prices, the secondary market "blood flowed into rivers", triggering a liquidity crisis. The 24-hour contract liquidation exceeded 3.8 billion US dollars, reaching 27 billion yuan. The largest single Bitcoin contract liquidation amounted to 58 million US dollars, or about 406 million yuan, and the single EOS liquidation amounted to 23.92 million US dollars, or about 160 million yuan.
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Network congestion, exchanges frequent technical failures
"It's going to zero, I made a mistake in my judgment, and it's too late to get out of the car." Liu Xin is a full-time investor who works with the market, long and short every day. He complained to PANews that he wanted to close the position at the beginning but there was no opponent. Drop, and then look at the exchange to suspend trading.
The waterfall market led to a surge in access and transaction volume. Some people wanted to buy the bottom, but technical failures occurred in multiple exchanges, and the public chain network was congested.
Some pages of the Huobi Global APP were stuck. Due to excessive traffic, some areas were congested, and then expanded at 9:40 p.m. on the 12th to solve the problem.
Binance founder and CEO Changpeng Zhao tweeted that there were some glitches in the Binance peripheral system. He revealed that the system load of the Binance platform has been five times higher than all previous peak periods. Binance processes 146,500 messages per second, and the market data push of one source is 30GB per second.
The cryptocurrency derivatives exchange FTX also experienced intermittent freezes last night, temporarily lowering the transaction frequency limit and expanding capacity at the same time.
BitMEX experienced a short-term downtime from 10:16 am to 10:40 am today, and its official response stated that it was caused by a hardware problem with the cloud service provider.
The system maintenance plan of OKEx Options, which was originally scheduled to be carried out at 20:00 on March 12, 2020, was also delayed due to market fluctuations.
Not only is the access to the exchange poor, but there is also a big "traffic jam" in the Bitcoin and Ethereum networks.
Due to network congestion, USDT and Ethereum were unable to withdraw coins for a short period of time, and there were even rumors that the exchange ran away. On the evening of the 12th, Qi Ye, CEO of Huobi Global, said in Moments that the chain is congested and is recovering. Do not listen to rumors, do not believe rumors. Sam Bankman Fried, CEO of FTX exchange, also said that due to the serious congestion of the Ethereum blockchain yesterday, FTX will increase the miner fee for ERC20 packaging for all users at its own expense, so as to speed up the withdrawal speed of users. The average transfer fee of Ethereum yesterday was more than 10 times higher than before.
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Mining machine will come to shutdown price again
Mining is an important part of the downfall. Last night and this morning, the electricity bill of the new generation of 7nm mining machines accounted for more than half, and most of the mining machines were turned off.
According to the data of f2pool, the 24-hour average computing power of the entire network is 110.81 EH/s, and 10 mining machines have reached the shutdown price, including: Whatsminer M3, Avalon A741, Ebit E9+, Antminer T9+, Avalon A821 / A9, Innosilicon T2, and the mainstream Antminer S9 on the market.
Mine shutdown, mine disaster coming? A senior mining market person told PANews that mainstream mining machines such as the Antminer S9 have basically paid back their costs after mining for many years, so the shutdown of these old models cannot be regarded as a mining disaster. mine disaster. For the miners, the real danger is that the previous pledged loans were forced to liquidate.
There is also an "amazing scene" in the block generation of Bitcoin. After Bitcoin was completed at block height 621,342 by the Coinprint mining pool, no new block was produced for an entire hour, and the average time for Bitcoin to produce a block was about 10 minutes. The exact reason is unclear, but rumors of a collective shutdown of miners are rampant. However, 1 hour later, after the OKEx mining pool exploded blocks, 4 blocks were exploded within 12 minutes.
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DeFi collective liquidation wave
DeFi is still a newborn in the encryption market. Can DeFi, which has not yet experienced a market cycle, experience the baptism of market changes?
Yesterday afternoon, Xu Yingkai, the founding partner of BlockVC, made investors panic about DeFi, "If Ethereum falls to $160, MakerDAO, the world's largest DeFi project, will start large-scale liquidation and liquidation. Will it become a systemic risk in this round of decline."
Then MakerDAO officially responded that the mortgage rate of the entire Maker system is around 300%, theoretically it can withstand an 80% drop, and there is no need to worry too much, and suggested that users who are about to touch the 150% liquidation line should pay back their debts as soon as possible.
According to DeBank data, the daily liquidation volume of DeFi products reached an all-time high yesterday, totaling $37.59 million, of which MakerDao accounted for the highest liquidation volume. Compound liquidations reached $12.07 million, while dYdX liquidated $6.41 million.
Facing the sudden sharp drop, some MakerDAO developers even suggested closing the protocol. MakerDAO officially announced that the current state of the Maker protocol is still healthy. There were no hacks, no bugs, and no emergency shutdown plans, but despite this, the protocol needed to be amended.
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Systemic risk coming?
The global spread of the epidemic has resonated in the global financial market, and the encryption market has also fallen into systemic risk.
From the perspective of the external environment, the decline in the global market is due to the shortage of liquidity. William, the chief researcher of OKEx Research, believes that investors have become risk averse, believe that cash is king, and begin to replace risky assets in their hands with short-term liquid assets, resulting in insufficient market liquidity. To what extent is liquidity scarce? Even though the New York Fed released $500 billion in liquidity in the early morning of March 13, it still failed to prevent the market from falling. At the moment when the liquidity shortage is extremely serious, Bitcoin, as a high-risk alternative investment asset with the highest volatility in the world, will naturally withdraw funds from it in search of safer and more liquid assets, and the price will plummet.
The market's decline was not without warning. On March 11, thousands of antique-grade bitcoins that had not been moved for 10 years were transferred to Coinbase, OKEx, Huobi and other exchanges. Within hours of the transfer, Bitcoin fell from $8,000 to around $7,500, which should also be due to the 1,000 BTC.
What laid the groundwork for the decline in currency prices is actually leverage and bubbles. The halving market has encountered hype, and retail investors have increased their leverage one after another, and the trading volume has repeatedly hit skyrocketing volumes. The money-making effect is widespread, the market is full of people, and risks follow.
Although he suffered a huge loss, the rational Liu Xin believes that this drop is also a return of value. "Everyone is playing with contracts, options and various derivatives. Spot USDT is borrowed short, and the contract spot is inverted, causing the price to often return to the moving average. It will be exhausted soon," he analyzed.
As a product of the last economic cycle, Bitcoin has not experienced a new economic cycle since its birth. The violent fluctuation of this "digital gold" is destined to not be a safe-haven asset.
For the currency circle at present, it is undoubtedly a great test of survival.
"Get your resume ready and go find a job." Liu Xin sent a message to Moments.
