Surprisingly … the price of Bitcoin fell by 91% on the Binance platform!
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Answer Surprisingly … the price of Bitcoin fell by 91% on the Binance platform!
Bitcoin (BTC) prices are down 91% in a matter of seconds, as the price of Bitcoin drops to $680 in the BTC/USDS trading pair on Binance.
Just as quickly, the price returned to its previous level.
He fell the event On Wednesday for those who are wondering how this was possible, we will provide the answer in the next lines.
Binance offers several supported currency pairs with its stablecoin and one supported by the USDS stablecoin, which is a stablecoin that is not as popular as its competitors and has low liquidity.
What happened is an outstanding example of a flash crash, where a person came and placed a large sell order to the market without verifying that the transaction book had sufficient liquidity.
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A market order is when a request is made to buy or sell Bitcoin at any available price. If a trader is using a market order for a large sell order, and the bid book has relatively low liquidity, the sell order will consume all buy orders and reach very low prices, as in this Binance incident .
Coin (USDS) is a small stablecoin with a daily trading volume of $3 million, and the BTC/USDS trading pair offered on Binance has only $30K-40K in liquidity.
Binance data indicates that the sell order that caused this drop was 8 bitcoins worth close to $60,000, a relatively low value but enough to clear the bid book from the illiquid pair.
Surely the trader who sold lost a lot of money because he sold bitcoins at prices far below the market.
On the other hand, some buyers benefited and were able to pay up to $680 for one bitcoin.
Similar event in Brazil:
In February of this year, a user bought some bitcoin (0.0047359) for $340 in TemBTC exchange, which equates to $72,000 per bitcoin, while the real price of bitcoin at that time was only $13,000.
Read:Ethereum founder Vitalik Buterin comments on the Ethereum Classic network!
It is an incident quite similar to what happened in the Binance platform, as the order applied in the market does not have liquidity.
The difference here is that in this case the merchant bought the bitcoin while in the case of Binance the user sold it.
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