Bitcoin Price ‘Flash Crashes’ To $6.1K – Here’s The Likely Reason Why

Bitcoin Price ‘Flash Crashes’ To $6.1K – Here’s The Likely Reason Why

A 5,000 BTC dump on Bitstamp likely caused the bitcoin price flash crash that occurred during the early hours (UTC) of Friday (May 17, 2019). Bitcoin plunged to as low as $6,100 on the exchange but has since recovered over $7,000 over the past few hours.

Whale Dump, Fat Finger Error, or Bot Glitch

A trader on the Bitstamp exchange reportedly put up a sell order of 5,000 BTC at an oddly low price of $6,200. This move caused a massive price plunge on the exchange, setting up a temporary arbitrage opportunity.

The effect soon spread across the market to other exchanges with the BTC market average falling to about $7,100. As at press time, Bitcoin had rallied to $7,300 on most of the popular BTC exchange platforms.

Details are still hazy at this point but there are three likely theories for what happened a whale dump, fat finger error, or a bot glitch. However, given the lack of significant volume variance at the time of the crash, it seems unlikely that the crash was as a result of a deliberate dump.

On the flip side, looking at the chart from Bitstamp, the dump occurred over a 10 to 12-minute period with the orders being continuously executing at consecutively lower levels than the market price.

Such a pattern reeks of manipulation but the tradeoff seems counterproductive unless they held high leverage short bets on another exchange, say BitMEX. Theoretically, the dump would cause massive liquidation of long positions thus ensuring profits for the trader.

Again, these are still speculative explanations, but Bitcoinist will continue to monitor the situation and provide updates as they emerge.

Bitcoin Price Parabolic Advance Halted

Fridays flash crash halted BTC/USD parabolic advance and confirmed predictions of a possible retrace. Bitcoin is currently down more than ten percent.

The crash also occurred at the tail end of what looked to be price fatigue for BTC with the parabolic advance losing a bit of momentum. With fundamentals largely unchanged, this slight blip might not be enough to stop the bull market completely.

On Thursday (May 16, 2019), Bitcoinist did anticipate that Bitcoin could be due a retracement, perhaps down to the mid-$6,000 level.

Elsewhere in the market, altcoins have also suffered significant 24-hour trading day losses after an impressive rally over the week. XRP is down about 15 percent with only a handful of the top-100 cryptos showing any positive price changes at the end of the week.

Do you think what happened on Bitstamp was a mistake or a deliberate whale dump? Let us know in the comments below.

Images via Bitstamp, Twitter @DoveyWan and TuurDemeester, Shutterstock

The post Bitcoin Price ‘Flash Crashes’ To $6.1K – Here’s The Likely Reason Why appeared first on Bitcoinist.com.

17.05.2019 / 00:10 131
Bitcoin Crashes 10% To $7,000 After Analysts Called For A Pullback Bitcoin Crashes 10% To $7,000 After
Volatility is back, that’s for sure. In the past 20 minutes, Bitcoin (BTC) has slipped at $7,800, wicking to $6,600 on Bitstamp as a result. It is
Ethereum Flash Crashes to $13 on Coinbase, Low Orders Reportedly Filled Ethereum Flash Crashes to $13 on
Earlier today, the Ethereum price temporarily fell to $13 on GDAX, a high performance trading platform operated by Coinbase. According to former
‘Fat-Finger’ Error Costs Norwegian Bank Storebrand Nearly $12 Billion in Value ‘Fat-Finger’ Error Costs Norwegian Bank
CCN is expanding. Are you our next full-time journalist from the West Coast USA? Send us your CV and examples here. Storebrand, a leading Norwegian
What Caused a Flash Crypto Crash to Wipe $15 Billion Out in Just Two Hours What Caused a Flash Crypto Crash to
FOMO Moments Markets are falling, altcoins getting hit hardest are EOS, Iota, Ontology, OmiseGo and Icon. That ongoing sideways ranging market has
Tokyo Bitcoin Whale Strikes Again: Mt. Gox Bankruptcy Trustee to Blame for Latest Bitcoin Price Drop Tokyo Bitcoin Whale Strikes Again: Mt.
Reports have emerged that the Mt. Gox bankruptcy trustee, Nobuaki Kobayashi is gearing up for another round of bitcoin selling. According to
Bitcoin Price Shrugs Off Yesterday’s $66 Million ‘Whale Dump’ Bitcoin Price Shrugs Off Yesterday’s
The sudden drop in bitcoin price on Tuesday caused some brows to get a bit sweaty, but its successful stability in the light of one account’s dump
Comments (0)
Add a comment
Comment on