The price of bitcoin has fallen suddenly in the last 24 hours.
From about $19,500 yesterday, bitcoin crashed to $16,350 earlier today, a slide of about 15%.
The world's first and largest cryptocurrency is currently trading at about $16,800 on Coinbase, according to tracker TradingView.
Bitcoin price crashes are generally a result of force liquidations at crypto derivatives exchanges. Indeed, nearly $1.9 billion worth of open interest was liquidated from exchanges in the last 24 hours, according to The Block Research.
It means exchanges liquidated traders' overleveraged positions. Traders overleverage, or trade on margin, thinking that bitcoin's price would go up and they would benefit more. But when the price of bitcoin goes below the liquidation price of their positions, exchanges force liquidate or close those positions. Force liquidations take place when traders are unable to fulfill their margin requirements for a leveraged position.
Binance experienced the highest liquidations, worth about $840 million, followed by Huobi and OKEx.
Source: Bybt, The Block Research