Over the last 24 hours the cryptocurrency ecosystem has lost a total of around $20 billion, likely over a ‘flash crash’ that saw bitcoin drop from around $7,700 to a $6,700 low on most cryptocurrency exchanges, caused by a 5,000 BTC sell order.
According to available data, the flagship cryptocurrency’s price suffered from a 5,000 BTC sell order on popular cryptocurrency exchange Bitstamp. On the exchange, BTC fell to a $6,200 low before it started recovering.
massive sell order at the front of BitStamp pic.twitter.com/RgOviG3a6p
— BTCVIX (@BTCVIX) May 17, 2019
The massive sell order has led to various theories, as users on social media struggle to find out why anyone would dump $36.3 million worth of BTC and flash crash the market in such a way. While some believe the dump could’ve been caused by bots glitching, others point to potential market manipulation.
As some users pointed out, if the trader set up a large short position on a derivatives exchange like BitMEX could turn out to be profitable if it managed liquidate long positions. This is possible as BitMEX uses Bitstamp and Coinbase in its price index.
Other theories revolve around Bitfinex, as the 5,000 BTC dump occurred shortly after it was revealed a New York judge ordered its affiliated stablecoin issuer Tether to freeze transfers to it. As covered, both firms were accused of an $850 million ‘cover-up’ earlier this year.
At press time, bitcoin’s price has started to recover from the ‘flash crash’ as it’s currently trading at $7,260 after falling 8.9% in the last 24-hour period, according to CryptoCompare data.
Given the flagship cryptocurrency’s drop, most altcoins quickly followed suit, leading to a $20 billion for the cryptocurrency ecosystem. Most cryptocurrencies are down between 6% and 14% in the last 24 hours.
XRP, ether, and bitcoin cash, which managed to briefly outperform the market earlier this month, are down 6.4%, 6.7%, and 9.7% respectively, while TRON’s TRX and Stellar’s XLM – which saw its blockchain go down for two hours this week – are down by 14%.
Despite the drop most cryptocurrencies are still up so far this month. BTC, for example, has still seen its price rise by 25.8% in May, and by 39.3% in the last 30 days. What’s behind this year’s crypto market rally isn’t clear, although some analysts point to rising tensions between the US and China.