Bitcoin (BTC) experienced a flash crash yesterday, with prices plummeting from $29800 to $27243 in just 60 minutes. The reason for this drastic price fluctuation has not appeared on the Bitcoin chart for a long time, which has sparked speculation about the cause of the crash
Bitcoin (BTC) experienced a flash crash yesterday, with prices plummeting from $29800 to $27243 in just 60 minutes. The reason for this drastic price fluctuation has not appeared on the Bitcoin chart for a long time, which has sparked speculation about the cause of the crash.
The popular Twitter account db (@ tier10k) and cryptocurrency market intelligence company ArkhamIntelligence are in the crosshairs of speculation. But what happened?
Is Bad Data Causing Bitcoin's Flash Crash?
It is said that the collapse was due to the US government's wallet transfer and the selling of Mt. Gox Bitcoin. Twitter account db automatically sent a tweet at 4:08 pm Eastern Time (8:08 pm World Standard Time) stating that "[DB] MtGox is trading with the US government wallet," which proved to be incorrect.
ArkhamIntelligence denies sending error messages to certain users. But @ tier10k also denied making an error: "[DB] Arkham: The error fix deployed today resulted in alerts being mistakenly sent to a small number of users," the account wrote as a reason and explained in a subsequent tweet:
I have to wait for Akam's clarification and don't want to blame mistakes. I believe they will express themselves soon. In the future, multiple on chain providers will be used.
As such, Arkham conducted an investigation into the DBAlert situation and determined that the Arkham alert was' correctly sent in this situation '. The platform claims that DB has set two alerts for all Bitcoin transactions worth over $10000 and named these alerts "MtGox" and "USGov".
Therefore, Arkham's description of the event indicates that DB infers transactions for a specific Bitcoin address from its own specified name.
When we fixed an error that prevented us from sending alerts on such a configuration, he subsequently received many alerts correctly based on his parameters. No one received inaccurate alerts, they just started receiving the alerts they had previously set, "Arkham said.
It is worth noting that Arkham also clarified that db's tweet did not trigger a flash of Bitcoin. According to Arkham's research, the crash started before db's tweets, "because the drop occurred between 19:17 and 20:01 Universal Standard Time (15:17 to 16:01 Eastern Standard Time), and alerts and tweets were sent after 20:07 Universal Standard Time and 20:08 UTC (16:08 UTC)
Cascade Clearing
The bottom line is that Bitcoin prices have plummeted by more than 8%, but as the data shows, this had already happened before DB's tweet. During this process, over $1 billion in open positions (leverage) were erased. According to Coinglas data, BTC cleared a total of $80.3 million in long positions and $73.4 million in short positions yesterday.
As further pointed out by analyst @ 52skew, the selling volume on the largest exchange is enormous. Binance's sales volume is 19400BTC, Coinbase is 5000BTC, Bitstamp is 1400BTC, and OKX is 6400BTC. He shared the chart below to explain what happened.
As of press release, Bitcoin prices have rebounded from the sharp decline. BTC has wiped out most of the losses and the transaction price is $29189.
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