(Asian News Hub) – Amid Bitcoin’s flash crash on Tuesday, a number of leading crypto exchanges buckled under pressure, preventing retail investors from buying the dip.
The price of several top cryptocurrencies fell sharply on Tuesday, with Bitcoin losing over 9%. The value of the flagship crypto plummeted from $52,000 to $43,285. And as of press time, Bitcoin had recovered to the $46,000 region.
Ethereum also plunged from $3,700 to nearly $3,000, losing about 18% of its value.
In the heat of Bitcoin’s hefty slip, there was a surge of traffic to exchanges as investors thronged to either liquidate their positions or buy the dip.
Customers are often allowed to open massive margin positions on most crypto exchanges. Huobi and Bybit, for instance, allow customers to have up to 100x margin. What this means is that customers can access a trading value of up to $100 by investing $1.
The margin rates on crypto exchanges are significantly higher than those found on traditional brokerages and they can fuel volatility in any direction.
