Bitcoin flash crashes 90%

See the latest Australian dollar analysis here:

Macro Morning

Rush and and buy it because it’s more sound even than gold. Via Cryptowhale:

Earlier this morning, many were shocked to find a massive red candle wick on the Bitcoin to US dollar charts. Around 3 dozen exchanges have seen a flash-crash ranging from $8400 to as low as under $4000.

This mysterious flash-crash happened just after Bitcoin surged to all-time highs following the Bitcoin Futures ETF launch, which created some hype.

The ETF Futures Launch has been a concern to many, especially considering Bitcoin topped out the exact week Wall Street launched futures in 2017. It’s largely known as a tool by them to manipulate prices, similar to what they actively do with Gold, Silver, and other assets.

Some notable crypto exchanges that were affected include Binance, Binance US, Kraken, FTX, and Coinbase. Thousands of users online have reported massive liquidations and stop-loss triggers.

These exchanges have yet to make any comments regarding these events, and it’s not clear whether this extreme volatility was caused by deliberate market manipulation or a costly mistake.

What’s even more suspicious is that this comes right after regulators forced Binance to require every user on the exchange to be KYC verified to trade. Right before this policy came into effect, they mysteriously transferred all Tether (6.3 billion) off the exchange to an unknown wallet.

I’ll be following this story closely, and posting any updates on Twitter.

When historians look back on crypto they will laugh out loud.

Houses and Holes

Comments

    • The Wizz of Ozz

      They will tax it out of existence as soon as transactions take place they hit it with huge tax the genies just been nutted

    • Ghost of Stewie Griffin

      Because this is the price level where genuine liquidity resides. Supposedly someone dumped a genuine sell order of around 600 BTC on one of the exchanges, which caused the ‘liquidity providers’ to turn off their algos, as they are too busy distributing their own BTC and didn’t want to be some whales bag holder (toxic flow).

      This then triggered a stop loss cascade that flash crashed the price down to $4,000 on Kraken and around $8,000 on Binance, along with around 24 other exchanges that share the same liquidity pool, which is the price level where genuine liquidity for any market volume actually resides.

      Once the selling subsided the liquidity providers turned their algos back on, and spoofed the market price back up to $64k on virtually no volume. Spoofing is illegal in all regulated markets, indeed JPM recently copped a $920m fine for spoofing the Gold market decades ago. Crypto isn’t regulated and so spoofing and other such price manipulation is rampant.

      Now just consider that this entire sell off was triggered by a genuine sell order by some whale for a mere 600 BTC and then consider that next month MtGox creditors commence receiving distributions of their share of 150,000 BTC which will start being sent out before then end of November:

      https://www.bloomberg.com/news/articles/2021-10-20/mt-gox-trustee-says-creditor-reimbursement-plan-is-approved

      From what my mate (who is a creditor, but I have taken at his word rather than looked up for myself) says, they will have to nominate the exchange that they wish to receive their coins too and then it will be up to the exchanges to distribute it to the individual accounts, rather than the civil rehabilitator mailing it out to everyone’s designated address. Consequently I image exchange insiders and large players, like Fortress Fund, who have been busy buying up MtGox creditor claims, will be given the first opportunity to sell the MtGox coin into any real liquidity that actually remains/exists, prior to most retail being able to act.

      But don’t worry if you are just a mug punter and not a MtGox creditor, I would expect the BTC price to hold up for a few weeks more as there was a movement of 15,000 BTC onto FTX this morning and that sort of volume will take a couple weeks at least to distribute into the market at these prices.

      • Camden HavenMEMBER

        I don’t pretend to understand all of what you have said, but in a general sense its very logical. The spoofing and the mirror of that, limited liquidity will be the Achilles heal for these ‘store of value’ alternatives.

        Happy watching

      • Well the flash crash didn’t fill any of my limit orders which were placed well above those prices on both the affected exchanges. Smells like BS to me. Or at least extremely fishy. I can’t see these wicks on TradingView either.

        I do agree that BTC is more likely to experience a bowel shaking drop than a price explosion now that the EFTs are open.

        Fiat settled derivatives over assets like gold and silver have NEVER acted to hold the price up. It will be the same with BTC. Derivative and derivatives of derivatives are more likely to suppress price than boost it.

      • Camden HavenMEMBER

        Surely the ‘bounce’ is ‘the fraudulent act’ the action that transfers the wealth from mug to whoever pulled the trigger on this crash.??

  1. I almost feel sorry for the mugs who had margin calls and were liuidates. I’m sure the exchanges will all be saying their BTC was closed on the lows. Well, ok, I don’t feel sorry for them at all, but it’s pretty disgusting to read this. This is why the stock market was regulated in the 30’s. Different technology, SME games.

    • kiwikarynMEMBER

      “On other cryptocurrency exchanges, bitcoin’s price dropped around the same time, but by nowhere near as much. On Bitstamp, for example, the price fell about 2.3% at 11:34 UTC but never got below $63,600.”

  2. The notion of liquidity in this mostly unregulated market is quite funny. A stampede for the doors at any scale will cause absolute destruction. You wont be able to get out fast enough and transactions will take months to actually register on the chain, everything will have to be done off chain (which kind of defeats the purpose of BTC and other coins to start with).

    I applaud those who made a fortune on crypto, they have played the system well. I fear for those who believe this is the 2nd coming of Jesus Christ and went all in without understanding its a bar brawl in Kalgoorlie and not the members stand at Wimbledon.

      • It will be game, set and match for the punters long after the pro’s have walked off the court.

        Thank you linesmen, thank you ball boys.

    • Ghost of Stewie Griffin

      Coinbase holds over $240bn in various crypto on their exchange yet only have $2bn in cash and liquids, so less than 1%. If there is $10bn of genuine liquidity in the entire crypto complex, then I would be very surprised.

      Personally, that is why I find the Evergrande theory so preposterous – as if Tether would allow real USD liquidity to exit the system to invest in dodgy, money hungry Chinese property developers, instead of being used to allow Crypto insiders to cash out.

      IMHO the crypto industry has encouraged this rumour simply to lend credence to the idea that the liquidity and capital in Crypto is deep enough to unflinchingly sustain a $30bn drawn down, when the reality is a $3bn drawndown would crash the whole complex.

      • In my limited knowledge of crypto trading… it appears to rely on instability for continued profits.

        But I’m surprised dropping only 600 BTC could cause this much volatility, when there are 21 million available.

    • Once upon a time, I hit a minor bump in the road in my 1974 Alfa Spider. Knocked the sump off 🙁

    • They will tax it out of mainstream existence on transactions genie nutted and stuffed back in sprukers bottle lol back the dark Web for you btc and prodigy