BTC Spikes to $6800, BitMEX Down for Maintenance

Bitcoin has stormed out of its week-long consolidation in truly dramatic fashion, yet the timing of the monster $5 billion buy rally has prompted a torrent of accusations from BitMEX users — seeming to coincide perfectly with the exchange’s scheduled downtime.

Bitcoin bulls seemed to come out guns blazing in one of the largest buy frenzies in weeks; pushing the coin up to $6800 — a near-6% spike in an hour. At time of press, Bitcoin market capitalization stands $5.2 billion higher than prior to the rally; however bears appear to be regaining strength as Bitcoin returns to below the $6700-mark.

Not all are convinced that the furious rally was organic, however. Occurring between 01:00-02:00 UTC, the rally appears to have overlapped precisely with the scheduled downtime of BitMEX — the world’s largest BTC/USD exchange by daily volume.

Don Le, CEO of blockchain research and investment group ChainRock, commented:

Is it a coincidence Bitmex is down for maintenance and we get a pump?

— Don Le (@DonLeCR) August 22, 2018

A Defenceless Short Squeeze?

Despite a stream of positive regulatory developments and corporate sponsorship in the cryptocurrency space, a number of industry leaders have called for lower lows — including BitMEX CEO Arthur Hayes’ prediction of a $3-5k bottom.

Unsurprisingly, with shorts stacking up to their highest levels since mid-April, the radical buy rally has been called by many as a run on buy stops by the industry’s more calculated investors.

Once user, @Bacon_Chain tweeted:

If you ever want to break $BTC free from consolidation…

Just get the exchange with the most trading volume to go down for maintenance

Whales love liquidating as many helpless people as possible

❤️Hug your local whale for this pump pic.twitter.com/RK7L82JLRZ

— Josh ? (@Bacon_Chain) August 22, 2018

Judging by earlier price action, such explanations are fitting. Although Bitcoin is a relatively young asset, the market has recorded a number of textbook short squeezes in its brief trading history — perhaps most recently mid-April’s $16 billion pump.

The latest squeeze has been met with a chorus of newfound disdain by liquidated investors, who claim bulls unfairly took advantage of BitMEX’s maintenance — with traders unable to alter positions during the one-hour window.

Some see the move as par for the course. Xane Corvair pointed out that shorters were not being taken advantage of by the ‘whales’, as they so claimed:

I know a lot of people just got liquidated but it’s kind of fitting. This many were so cocky about shorts being an easy win, and big money took advantage of downtime timing. Pretty well-played.

— Xane Corvair (@Crypt0Entropy) August 22, 2018

Others seem to see more devious tactics at play, however. One Twitter user, @CryptoMistik, directly accused BitMEX themselves of orchestrating a “scheduled stop run”.

While such accusations may be viewed as extreme, the concerns of the cryptocurrency community have carried surprising weight. After facing a series of accusations of price manipulation in 2017, vocal Litecoin bull (and founder) Charlie Lee sold his entire stake in LTC to avoid conflict of interest.

As an outspoken commentator on the price of Bitcoin, BitMEX’s Arthur Hayes may have pushed exchanges into the same spotlight of heavy scrutiny as Lee.