A 5,000 BTC dump on Bitstamp probably caused the bitcoin price flash crash that occurred in the early hours (UTC) Friday (May 17, 2019). Bitcoin doubled 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 set up a selling order of 5000 BTC at a remarkably low price of $ 6,200. This move led to a huge fall in the price of the stock exchange , and created a temporary arbitrage opportunity.
The effect spread rapidly across the market to other exchanges with the BTC market average falling to around $ 7,1
Details are still unclear at this point, but there are three likely theories of what happened – a whale dump, fat finger error, or a bot glitch. Due to the lack of significant volume variation at the time of the crash, it seems unlikely that crash was due to a deliberate dump.
On the back, look at the chart from Bitstamp, the dump found over a 10 to 12-minute period with the orders being continuously executed at consistently lower levels than the market price.
Such a pattern package of manipulation, but the deviation works against productive, unless they held high leverage short stakes on another prey, BitMEX says. Theoretically, the dump will lead to massive liquidation of long positions and thus secure profits for the trader.
Since no one wants to keep 5000 BTC only on exchange, this is the deliberately planned dumping plan, also manipulation imo
The dumper can on a hand-dumped stamp with poor liquidity> move the Bmx contract> 100x short on Bmx to take big advantage of stacking cheap BTC
– Dovey Wan 🗝 🦖 (@DoveyWan) May 17, 2019
Again, these are still speculative explanations, but Bitcoinist will continue to monitor the situation and provide updates as they come.
Bitcoin Price Parabolic Advance Stopped
Friday's flash crash stopped the BTC / USD parabolic advances and confirmed predictions of a possible retrace. Bitcoin is now down more than ten percent.
– Tuur Demeester (@TuurDemeester) May 17, 2019
The crash also occurred in the tail end of it which seemed to be a price exhaustion for the BTC with the parabolic progress, and lost some speed.
On Thursday, May 16, 2019, Bitcoinist predicted that Bitcoin could be due to a retracement, perhaps down because of the basics largely unchanged. This little blip may not be enough to stop the beef market completely. to mid $ 6,000. In other places in the market, altcoins have also suffered significant 24-hour day loss following an impressive rally during the week. XRP is about 15 percent with only a handful of top 100 crypts showing some positive price changes at the end of the week.
Do you think what happened at Bitstamp was a mistake or a deliberate whale dump? Please let us know in the comments below.