Look At Bitcoin Flash Crash History: How Do Past BTC Recovery Value Attempts Shape Up?


BTC Flash Crashes: Brief Historical Look As Bitcoin Attempts To Make A Recovery

The latest bitcoin flash crash contributed to putting an end to the crypto’s recent bull run. The crash saw bitcoin lose as much as ten percent of its value, after finally managing to double its trading prices for the first time this year. The result of this crash was a widespread market panic.

The market panic led to the shredding of close to twenty-one billion dollars from market capitalization within twenty-four hours. Less than forty-eight hours later, the crypto has gone back to its original trading position. By the time of going to press, the crypto was at the eight-thousand-dollar mark.

Flash Crashes

Flash crashes are quite popular in the cryptocurrency market. Often, the prices are determined by the news cycles and the crypto whales as opposed to being driven by market value. Even though there have been instances where a flash crash has caused a total market collapse, many seasoned bitcoin investors are unperturbed by their occurrence.

Seasoned investors will often choose to ride the crash, and wait for the crypto to start making a recovery. In the last few years, there have been several flash crashes that have not managed to harm the bitcoin in any way.

Bitcoin Flash Crash Causes

The latest flash crash can be attributed to a big sell order of close to five thousand bitcoins. The sell order was placed on Bitstamp, with each bitcoin on offer selling at 6,200 dollars. The valuation was thirty percent lower than the prevailing market rate at the time.

As a result, panic hit the market and started to spread to various crypto exchanges. Bitstamp was at the forefront, as it led the charge for reduced bitcoin prices. It is a sentiment that soon started to spread across the market.

@DoveyWan, an influential cryptocurrency identity, suspects that price manipulation was behind the latest bitcoin flash crash. The identity makes the argument that no person with five thousand bitcoins would choose to leave their crypto on an exchange to sell innocuously.

Flash Crash Price Drops And Seasoned Investors

As mentioned earlier, many seasoned bitcoin investors are unmoved by some of these price drops. A ten percent drop in bitcoin prices will, in many cases not bother them to change their investment strategies. However, there was one major fall that did move the industry. It was the flash crash of 2011 that saw bitcoin prices fall from thirty-two dollars apiece to one cent for each bitcoin.

The flash crash was occasioned by a malicious hack executed on Jed McCalebs’, the founder of Mt.Gox account. Even though Jed had sold the exchange to Mark Karpeles three months before that, he had managed to retain the admin rights to the exchange platform.

Traders And Market Dips

Many flash crashes are related to price manipulation and malicious hacks. However, flash crashes driven by news cycles have also started to become quite frequent. As the crypto starts to make a recovery, it is worth pointing out that the journey has not been easy. The crypto fell by close to 11 percent last December in a single day.

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