Bitcoin 'Flash Rally' Briefly Pushed BTC Derivatives Above $56K on Bitfinex

The spike triggered a series of liquidations on the exchange.

AccessTimeIconMay 2, 2023 at 3:36 p.m. UTC
Updated May 9, 2023 at 4:13 a.m. UTC

Bitcoin's (BTC) price on Bitfinex's perpetual swap market momentarily topped $56,000 on Tuesday – well above prevailing levels elsewhere and prices on Bitfinex's exchange right before or after – amid a flurry of volume amid an absence of liquidity.

Trading volume on Bitfinex's BTC-PERP market spiked to 322 BTC ($9.1 million) between 14:24 and 14:26 UTC, equating to around a quarter of daily volume on the trading pair.

Some traders' positions were liquidated amid the flash rally, according to data on Bitfinex's trading platform.

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Bitfinex spike (Bitfinex)

The move occurred at the same time as bitcoin surged 2.5% on spot markets elsewhere as investors reacted to the stock prices of two banks, Pacwest (PACW) and Western Alliance (WAL), plunging by more than 30% as concerns about the U.S. banking system resumed.

At press time, the BTC-PERP pair has 10% market depth of 110 BTC, meaning that an order to buy 110 BTC would move the price on that specific market by 10% – evidence liquidity remains low on Bitfinex.

Paolo Ardoino, Bitfinex's chief technology officer, tweeted: "Low liquidity at that moment in time. But system worked as expected. Matching engine handled all orders correctly."

UPDATE (May 2, 2023, 14:40 UTC): Adds a tweet from Bitfinex's CTO.

Edited by Nick Baker.


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Oliver Knight is a CoinDesk reporter based between London and Lisbon. He does not own any crypto.

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