Taking a deeper look into yesterday’s bitcoin price drop

Bitcoin experienced a strong sell-off yesterday, as the price plummeted all the way down to $8,000, marking a new three-month low. Although the reasons for the dip are still unclear, analysis of the trading volumes in the derivative and spot markets can give us some insight.

Most of the bitcoin price drop occurred within a one-hour time span, between 6:45 p.m. UTC and 7:45 p.m. UTC, where the price decreased from about $9,300 to $8,000 (a 14% decline). Looking at Bitmex and Deribit, we can see that the hourly trading volume for BTC perpetual contracts rose substantially around this time.