Who caused the Bitcoin flash crash? Binance names a culprit

An algorithm that does its own – Bitcoin (BTC) registered a new ATH on October 20. While the asset traded at an average of over $ 60,000 after this event, anyone would dream of being able to redeem bitcoin for less than $ 10,000. Some traders had this incredible luck, following a flash crash on the Binance.US platform.

Bitcoin at $ 8,200 on Binance

Remember: April 14, 2021, Bitcoin had reached a new ATH at 63 500 dollars, after registering an increase of more than 700 % in the space ofun an. Subsequently, its price fell back to a low of 29 900 dollars, on July 21. More recently, the price started to rise again before recently reaching a new ATH at $ 67,200, last October 20.

As traders around the world scanned the curves for another meteoric rise, traders were extremely surprised to see a red candle bring Bitcoin to the 8 200 dollars on the platform Binance. Indeed, on October 21, the platform Binance.US recorded what is called a flash crash. In a matter of moments, Bitcoin’s price rose from over $ 60,000 to $ 8,200, reflecting a 88% drop of its value.

Flash crash recorded on Binance US – Source: The Block

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A Bitcoin trading algorithm questioned on Binance

Obviously, the entire crypto sphere has questioned the causes of this sudden fall. Contacted by our colleagues at TheBlock, the exchange platform Binance.US explained that the fall was caused by a dysfunction in L’trading algorithm from one of its institutional investors.

Fortunately the bug was quickly identified and corrected by the customer in question:

“We are continuing to review the event, but the customer told us they fixed their bug and the issue appears to have been resolved. “

Obviously, many traders have been extremely surprised at this error. Indeed, most, if not almost all, trading algorithms have a security device to prevent such events from happening. For example, a feature to automatically cancel trades if they deviate too much from the “normal” price.

What is more, many other users were affected by this instantaneous fall. From type orders stop loss could be executed following this flash crash. For the time being, no information was not communicated by Binance on this matter.

This event is not a first in the crypto ecosystem. Last February, Kraken had also witnessed a flash crash, causing ether to go from $ 1,600 to less than $ 700 in a matter of moments.

Believe it or not, whether it’s 8,000, 60,000 or even $ 100,000, Bitcoin will always be a steal! So as not to miss the opportunity of a lifetime, Register without delay on the FTX benchmark crypto exchange platform and benefit from a lifetime reduction on your trading fees (affiliate link, see conditions on the official website).