Bitcoin at $7300 in recovery after 5,000 BTC Bitstamp sell order

bitstamp acquired

updated 17 May 2019 15:09 GMT

Bitcoin fell to as low as $6,600 in a $1,000 (17%) drop, in an outbreak of extreme volatility after a huge sell order on Bitstamp, putting a cap in the surge of recent days.

Currently trading at $7,336, signals of weakening price support was previously in evidence in a shift into altcoins.

The flash crash of sorts took place overnight during Asia trading.

BTCUSD briefly dropped to $6,600 overnight on Asia trading

Bitstamp 5,000 BTC order to blame

A 5,000 BTC order on Bitstamp, one of the oldest exchanges in the marketplace, is thought to have been behind the flash crash.

One trader, Jonny Moe, was following events at Bitstamp and tweeted:

Bitstamp is key to price discovery in the leveraged markets provided by exchanges such as BitMEX and so the happenings on Bitstamp cascaded through the marketplace, although recovery was swift.

Simon Peters, Analyst at eToro, the multi-asset investment platform, said:

“Bitcoin’s blip appears to have been caused by a significant sell order placed on the Bitstamp exchange early this morning, which triggered selling across other exchanges, Whether this order was a deliberate dump or a fat finger error remains to be seen.

“Given the positive sentiment in the market over the past few weeks, it’s likely that the price will recover soon.

“However, this drop is a stark reminder that cryptoassets still operate in a nascent market, which is susceptible to significant price moves by whales.”

After a 39% rise in little more than a week, leading to a spike in bitcoin Google searches for example, a period of consolidation may be in evidence, but all eyes will now be on the key $7,000 level.

If that level is breached today if might put paid to the near term bullish view that any dips from $8,000 would witness “buy the dip” moves from market participants.

However, these sort of trading patterns are nothing new to long-in-the-tooth bitcoin traders and the recovery from the lows will b e taken as indicative of the strength of the market at the moment.

Ethereum slides

Ethereum is down nearly 8% at $240 but is still in an uptrend and XRP off 12% knocked back to $0.383.

The majority of coins are showing losses in double figures with the only exception among top coins being Cosmos, up 7% at $.71

With crypto markets still dominated by a relatively small number of large investors known as whales, it doesn’t take a great deal of activity to move the market dramatically either to the upside or downside.

Mark Mobius warms to bitcoin

Mark Mobius

Standing back from the minutiae of the charts, on the bigger picture there was good news in terms of the firming case for institutional adoption.

This came from Mark Mobius, a famed investor who had previously been dismissive of bitcoin, describing its a “real fraud”.

“There’s definitely a desire among people around the world to be able to transfer money easily and confidentially. I believe bitcoin and other currencies of that type are going to be alive and well,” he said in a Bloomberg podcast.

About the Author

Gary McFarlane
Gary is the cryptocurrency analyst at interactive investor. He writes for Coin Intelligence News in a personal capacity and none of his comments should be considered investment advice. gary.mcfarlane@coinintelnews.com

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