A recent incident involving fake tweets from the SEC’s X account caused significant fluctuations in the price of Bitcoin, leading to the liquidation of approximately $90 million worth of long and short positions.
This highlights the potential risks of manipulation within the cryptocurrency industry. On Tuesday, hackers gained access to the SEC’s X account and posted a false announcement about the approval of a Bitcoin exchange-traded fund (ETF).
This caused the price of Bitcoin to jump from $46,800 to $47,680, before falling to $45,400 after the tweets were discovered to be fake.
Traders and automated bots reacted quickly to the tweets, with over $500 million in futures positions being opened within a ten-minute period.
However, the highly-leveraged positions were impacted as prices quickly changed. Approximately $50 million in long positions were liquidated, while $36 million in shorts were also affected.
Liquidation occurs when an exchange forcefully closes a leveraged position due to the trader’s inability to meet margin requirements.
