Breaking Down The Bitcoin Binance Flash Crash By The Second
26 Octubre 2021 - 06:15PM
NEWSBTC
On October 21st, 2021, crypto exchange Binance US experienced a
Bitcoin flash crash to led BTC’s price to dropped by over 80%. The
industry is maturing, but these occurrences reminiscent the times
when a crypto flash was business as usual. Related Reading | Brace
For Impact: Wall Street Is Headed Straight For Bitcoin, Says
Analyst A report by Arcane Research deep dives into the event,
starting from the time it happened on the aforementioned date at
11:34:17. At this time, as the research firm claims, a “sudden
massive selling pressure cleared the order book” on the exchange.
This caused Bitcoin to crash all the way down to $8,200 for a whole
13 seconds. This parenthesis was enough for Binance US to
experience a spike in its trading volume with 550 BTC changing
hands, as Arcane Research said. The research firm compared Binance
US normal sell volume to that of this event. The former stands at
0.74 BTC in a 4-hour timeframe, “illustrating that this massive
sell order (550 BTC) was” extraordinary, Arcane Research said while
adding the following: What caused the crash? A fat finger by
someone meaning to place a limit sell order at $82,000? An engine
error? A Combination? Binance has stated that it was caused by a
bid in the trading algorithm of one of the institutional traders on
the exchange. This entity created a domino effect which wrack havoc
across all Bitcoin exchange platforms. The research claims that the
price of BTC dropped $1,000 as a result of this bug. After, there
were irregularities with different exchanges with Kraken seen its
BTC/USD pair trading at a “growing discount”, Arcane Research said.
On this platform Bitcoin traded at $55,500 while other exchanges
were trading at $64,000 per BTC. Related Reading | BTC Holders
Reduce Spending, Why Bitcoin Could Get More Rocket Fuel As seen
below, the event extended to 11:35:06 with the Kraken discount
stabilizing around this period. Arcane Research pointed out that
this exchange operates with less efficiency during volatile
markets. Bitcoin Down The Trading Rabbit Hole Brett Harrison,
President of crypto exchange FTX US, commented on the event. He
explained the different trading orders and how they operate when
Bitcoin increases its volatility levels. In this case, the price of
BTC trended to the downside reducing the liquidity in the market as
it moved further down. Harrison said: Those trade prices will
trigger stop loss or take profit orders, which themselves are
market orders and will cause even more liquidity to be taken. The
combination of market orders and lack of liquidity cause the price
to spiral downwards in an extremely quick fashion. Harrison
clarified that the Binance US Bitcoin crashed was caused by an
institution setting a large number of market orders that “cleared
the bid side” for the BTC/USD trading pair order book. This
triggered a liquidation cascade while BTC’s dropped in the
platform. FTX president used the U.S. futures market to exemplify a
different market that used to suffered from this problem until it
implemented “guardrails”. This could “help prevent short term
microstructure issues”. Related Reading | Bitcoin Futures Heating
Up, Why BTC Traders Should Expect Volatility The implementation of
these types of solutions, in combination with others, could help
bring more “maturity” into the crypto market, the executive
claimed. 18/BTC/USD dropping as much as it did on some exchanges
was not reflective of an actual move in the fair price of Bitcoin,
it was a temporary dislocation due to exchange dynamics. Price
bands, volatility pauses, and auctions can help prevent this
situation reaching such extremes. — Brett Harrison (@Brett_FTXUS)
October 25, 2021 At the time of writing, BTC trades at $60,412 with
a 4.5% loss in the daily chart.
Bitcoin (COIN:BTCUSD)
Gráfica de Acción Histórica
De Feb 2024 a Mar 2024
Bitcoin (COIN:BTCUSD)
Gráfica de Acción Histórica
De Mar 2023 a Mar 2024