Conversation

9) Things kept grinding down as they sloooooowly lowered their liq offer. All the way down to $3.7k.

10) But they didn't work it aggressively, they kept on hoping it would just go away. That's NOT how a liquidation engine works. A liquidation engine's primary job is to save the insurance fund and other customers, even if that has significant market impact.

136

11) And then, when things were teetering on the edge, with quarterly premiums at -15%....... BitMEX went down for maintenance.

120

12) BTC rallied without the gigantic sell wall of the BitMEX liq. And even more than that--BTC rallied, so fewer people *had* to be liquidated..... Creating a self-fulfilling prophecy. If we could will BTC up above $5k, maybe then it would no longer *need* to go down.

140

13) So why did BitMEX go down for maintenance? And why was their liq engine so aggressiveness today? Was it organic?

103

14) Or did BitMEX realize that they had a choice? They could liquidate BTC down to 0..... Or they could go down for an hour, let BTC rally, release some of the liq pressure, and hopefully catch a positive feedback loop removing the need to ever liq the BTC.

177

15) Note that Deribit was playing a similar role, and went down at the same time.

137

16) Anyway probably this is wrong, and probably it really was just maintenance. But maybe not. Maybe BitMEX realized the position it was in: an insane amount of leveraged positions, no liquidity, and no prime brokers to allow arbitrage to save us.

165

17) (By which I mean--people couldn't buy on BitMEX unless they had BTC physically there.... And then they'd risk themselves getting liquidated in the cascade, with none of their short hedges offsetting their risk engine, and a congested blockchain preventing topping up.)

118