BTC Whale Manufactured the Flash Crash
You might be aware that during the last few hours Bitcoin has taken a huge hit. The price fell over $800 within a 3-hour span bouncing from a vital support line. Why did the flash crash happen though?
Whales manipulate the market
The crypto market has always been a target for the so-called whales due to the highly unregulated environment. This acts as a perfect setup for them because regardless of the damage caused, they cannot be held liable. The whales that we're talking about in this article are the "exchange-whales", known for their large orders that can easily go above 1,000 BTC causing a panic sell or a FOMO (fear-of-missing-out) depending on which side the order is placed.
Today's flash crash was manufactured
If we have a quick look at our partner's service (whale-alert.io) we can notice the following chain of events took place:
- About 20-30 minutes before the crash took place, a whale has moved 25,000 BTC (worth an approximate of $215,000,000 at the time) to Coinbase: link
- An hour after the crash, a whale moved 14,000 BTC (worth an approximate of $112,000,000 at the time) from Coinbase to another wallet link
- After 40 minutes, a whale moved 11,000 BTC (worth an approximate of $88,000,000 at the time) from Coinbase to another wallet link
- Another 15 minutes later, a whale moved $10,000,000 (USDT) from one wallet to another link
If we do the math and follow the timeline of this chain of events, it's not that hard to see that someone (the whale) has dumped 25,000 BTC for $215,000,000 and bought it right back shortly after for only $200,000,000. In doing this, they pocketed a stunning $15,000,000 profit within 3 hours and walked away with the same amount of BTC as they had in the beginning (25,000 BTC).
"But no one complains when whales push the price"
There have been lots of people who addressed their concern regarding whales so far, but many still believe that the complaints are unfounded because "when the price goes up $1,000 in a day it's a good thing and no one complains, but when it drops $500 in a few minutes people get mad". All I can say about this is: when the whales drive the price up, it's a win-win because everyone's position grows, however, when they crash the price like today, it's only one person profiting - the whale. Those $15,000,000 profit were money that the other trades have lost due to the fear of possibly losing even more.
In conclusion, it's safe to say that the market is still easily manipulated by billionaire whales, so always make sure to do your research before entering any position!