- The crypto exchange BitMEX has issued a statement on the unexpected 58% crash in the price of the XRP and its “The Fair Price Marking” method.
- Despite the crash, the XRP price has shown strong momentum reaching a seven-month high.
Following the events of February 13 this year, BitMEX issued a statement on the short-term crash of XRP and announced its findings. On the date referred to, the price of XRP token fell by 58%, from 0.34 USD to 0.14 USD.
Many traders’ positions were liquidated when the XRP price crashed and their stop losses didn’t shoot up. Traders criticized and blamed BitMEX. Some traders claimed that the crash was caused by the exchange, others blamed BitMEX CEO Arthur Hayes. In early February, BitMEX introduced the perpetual swaps for XRP.
BitMEX responds to sudden crash of XRP
The crypt exchange gave an initial response and claimed that the event was triggered by “market factors”. However, in the face of traders’ frustration and criticism BitMEX issued a new statement:
We understand traders’ frustration when prices move quickly against their positions. However, we’ve investigated recent activity on our XRPUSD perp and our system performed as expected, and prevented liquidations.
BitMEX stated that its system known as Fair Price Marking worked as expected. According to the exchange, the system stopped the operators’ liquidations according to the configurations they selected. No liquidations occurred on the XRP/USD pair on the date of the event between 14:00 and 14:02 UTC. BitMEX stated:
Last Price-triggered stops are vulnerable to fast market moves. A Stop Market executes the whole order at best available price. Stop Limits limit execution price, but may not fill the whole order; Fair or Index Price triggers aren’t directly affected by the Last Price.
In addition, BitMEX added that no protection measure is foolproof. Traders can still be affected by sudden movements in the market. BitMEX claims that their Fair Price Marking system was designed to protect users in these scenarios, but that stop losses are selected at their discretion.
No market can guarantee protection against sharp movements for all users under all circumstances. We pioneered the Fair Price Marking system and designed it to protect users from liquidation in this scenario. For stops, users may select which trigger to use at their discretion.
Affected traders will not be reimbursed. BitMEX claims that their insurance fund does not apply to their cases. The insurance fund, according to BitMEX, only applies in situations where a user’s margin of loss exceeds the assets allocated in their position and these assets are due to another user:
The Insurance Fund does not protect users from slippage on a market order.
The exchange has made itself available to users who have specific questions.
XRP price in bullish trend
Despite the event on BitMEX, the price of the XRP remains in an upward trend. At the time of publication, the XRP is trading at a price of $0.33 with gains of 2.27% in the last 24 hours. In the weekly and monthly charts, XRP has gained 19.65% and 43.57% respectively.