Crypto Market Crashed, a Suspect Found
The crypto market crashed on Friday morning (UTC time) suddenly, erasing almost all its gains this week, before rebounding somewhat.
All major coins are in red now (04:14 UTC), while the absolute majority of tokens among the top 100 dropped by 10%-20% in the past 24 hours. The total market capitalization is down almost 10%, to USD 234 billion.
Bitcoin dropped almost 10%, ether lost almost 7%, while XRP, Stellar and Cardano are the biggest losers among the top 10 coins.
Top 10 coins by market capitalization:
Bitcoin price chart:
According to Tuur Demeester, founder of Adamant Capital, a Bitcoin alpha hedge fund, and some other members of the cryptoverse, this flash crash was lead by selling on the Bitstamp exchange, where bitcoin price fell to as low as USD 6,178 before rebounding above USD 7,000 again.
Bitstamp confirmed that a large sell order was executed on their BTC/USD pair today, "strongly impacting the order book." However, they claim that their system "behaved as designed, processing and fulfilling the client’s order as it was received."
If the order was placed and executed as intended, then the goal of the seller was to inflict maximum impact. In equities that person would be fined and potentially locked up depending on the jurisdiction. Love to see how this turns out but would imagine nothing happens.— taiwandan (@taiwandan) May 17, 2019
“This last drop was likely caused by a combination of profit-taking and also algorithmic trading compounding the swift fall,” Jehan Chu, co-founder of Kenetic Capital, told CNBC. According to him, we can expect these types of steep rises and drops to continue for some time until institutional investors grow market volume.
He also stressed that the overall interest and investment continues to expand around a growing core of real blockchain use and adoption.
According to Mati Greenspan, senior market analyst at eToro, the recent pullback "is a great thing because it will allow us to better understand the nature and scope of the recent rally."
"When things are just going straight up, it becomes really difficult to tell how far they'll go and how far they'll fall after. It should also help us to eventually make the distinction and say if this is a bull market or just a bull run. Not to mention, providing a cheaper price for those looking to buy in without having to buy the top," he wrote in his daily commentary.
Watch Mati Greenspan discussing markets on Bloomberg:
I've never seen anything quite like this before. I've seen similar things, but nothign that moved the market nearly 20%.— lowstrife (@lowstrife) May 17, 2019
Huuuge #BTC long liquidation on Bitmex on that huge sell-off just now which is reportedly driven by a massive sale of 3600 BTC on @Bitstamp. Some reports this could have been an algo gone wrong! Every bid from $7800 to $6200 wiped out in less than 15 minutes. pic.twitter.com/jKQj0sFhii— taiwandan (@taiwandan) May 17, 2019
Even more egregious on ETHUSD. Mex wicked to 190, while low elsewhere was ~235. pic.twitter.com/nhsKhtOZOP— Su Zhu (@zhusu) May 17, 2019
This is what happened— Dovey Wan 🗝 🦖 (@DoveyWan) May 17, 2019
1. A jackass put up an aggregated sell of 5000 $BTC on stamp
2. Stamp poor depth + algo glitch?
3. Bmx index is 50% on stamp
4. Massive Bmx liq tanked the mkt
5. Despite all ☝🏻BTC quickly bounced back to $7000
This might be the best chance to BTFMD
Sounds like this entire event was someone price manipulating by mass selling on Bitstamp to buy on Bitmex. Good news is the market bounced back.— Crypto Quantamental (@CryptoQF) May 17, 2019
If we get back to 8k in a few days there is zero doubt we are in bull season