Why the Bitcoin price just dropped 4% in a single hour, liquidating $20 million

The Bitcoin price just dropped by more than four percent within one hour—from $9,224 to $8,851—after 52 hours of ranging with low volatility and volume.

The sudden drop led to the liquidation of $19.25 million on BitMEX and $1.5 million on Bitfinex based on statistics from Datamish.com, causing a sizable long squeeze in a short period of time.

What triggered the abrupt Bitcoin price pullback?

Typically, after several days of low volatility in a tight range, the Bitcoin price tends to see a large movement.

While extended periods of ranging do not necessarily point towards a bearish action, in the case of Bitcoin as of recent, it saw a steady climb in its price with low volume.

An upward trend with declining volume usually suggests that the probability of it being a fakeout before a large downside movement is high.

The significant amount of long contracts placed across major margin trading platforms including BitMEX, Binance, and Bitfinex, and the low volume across the crypto market…