Title: The Day Bitcoin Crashed: What Really Happened on March 12, 2020—Crypto's Worst Day in 7 Years
March 12, 2020—now infamous as "Black Thursday"—was one of the darkest days in Bitcoin’s history. In just 24 hours, the crypto market was rocked by two devastating crashes, sending Bitcoin plunging to its lowest point in seven years. At one point, the price briefly dipped below $4,000, marking a 50% drop in a single day. But what really happened during this chaotic market meltdown?
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Two Waves of Destruction
The first shockwave hit early in the morning with a 25% decline, triggered by global panic in traditional markets as traders sought to de-risk their portfolios. While sharp, the drop was orderly. Yet, it was the second plunge later that evening that turned the crypto world upside down. A series of liquidations by lenders offloading collateral from insolvent borrowers snowballed into a full-blown collapse. The market structure was obliterated.
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The Perfect Storm: Miners, Liquidations, and Liquidity Drying Up
To add fuel to the fire, some Bitcoin miners began shutting down their operations after the second crash, further destabilizing the market. As the price plummeted, chaos reigned on BitMEX, a platform notorious for its high leverage. With traders forced to liquidate leveraged positions, a cascade of sell orders flooded the market. The situation spiraled out of control as liquidity providers pulled out, and spreads between BitMEX and other exchanges, like Coinbase, soared above $500.
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A Historic Collapse
What followed was a complete liquidity breakdown. With no one left to buy, Bitcoin briefly nosedived to a historic low, wiping out billions of dollars in market value. For a brief moment, the crypto world stood still, shaken by one of the worst single-day crashes in Bitcoin’s history.
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March 12, 2020, stands as a stark reminder of Bitcoin’s volatility, a day when market structure unraveled, and chaos reigned. Yet, in the aftermath, the market bounced back stronger—reinforcing the unpredictable yet resilient nature of cryptocurrency.
