Just as Shanghai was beginning their working day, at around 9:54 AM their time, a limit order of 3,645 bitcoins was placed on Bitstamp.
As you might know, Bitstamp is sort of Europe’s crypto exchange. They probably have Americans too, but they mostly go to Coinbase. Just as Europeans go to Coinbase as well, but Bitstamp is sort of their local exchange.
That’s very relevant because it was 2:54 AM in Europe. Everyone was very much asleep. Thus the whale strikes at night.
We’ll get to who the whale might be, but price moves a bit lower by circa $50. The next minute, 55, it is down another $50 to $7,600.
This goes on, until at 59 there is a drop of $200. Then from 0 onwards, there’s a drop of almost precisely $100 per minute until 08.
Bitcoin flash sell-off, May 2019
At or around 10:08 AM Shanghai time (3:08 AM London time), the show has kind of ended. We then have that big bounce in green, up by $1,000 in one minute.
It jumps another $400 next minute, before another very small sell-off, with the price then recovering a bit more slowly, rising to current levels in about 7 minutes.
That’s where it stays with then normal market operations continuing after what is estimated to have been a $25 million sell-off.
Who Done It?
Well, obviously China. Yuan is falling and quite a bit. It has now crossed 6.9 CNY to the dollar. There is an exodus of sorts from their markets. Shanghai stocks have dropped another 2.5% to now 2880.
In this environment, China’s central bank, PBoC, must be very active. Are they now accounting crypto in their market strategy? Who knows.
It could obviously be just a Chinese miner who needs some funds, but miners are now sophisticated with trading desks. They wouldn’t be so stupid.
A trader may have had the balls, but it’s a very high risk strategy that might have actually cost him or her quite a bit of money.
This appears to have been designed to lower confidence and perhaps not for gain but as policy management.
It’s pretty much identical to the flash sell-off at the end of February. That didn’t work. Bitcoin then went on to double and more.
Whether it will work this time remains to be seen, but as excitement comes back to crypto, such things are to be expected.