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Earlier today, the bitcoin price temporarily dove from $65,820 to a meager $8K on Binance.US, losing some mind-boggling 87% in value before making up those losses in the span of a single minute.

Bitcoin Flash Crashes To $8K On Binance.US

Bitcoin endured a violent correction on Thursday, but only for Binance’s exclusive United States cryptocurrency exchange, Binance.US. In particular, the exchange printed a one-minute candle that caused an 87% pullback as the price of the pioneer cryptocurrency hit $8,200 with a trading volume of 592 BTC.

Flash crashes are a common occurrence in the crypto and traditional markets. However, the magnitude of Binance.US’s crash attracted the ire of the cryptocurrency community with one trader noting: “This type of shit just shouldn’t be happening. It’s not fair that some get stopped out and some stay in, some get fills and some don’t.”

The flash crash on Binance.US did not affect the price of bitcoin across the broader market. On other major spot exchanges, the price of the asset plummeted to around $64,150. Despite attempting to bounce back, it failed to recapture its pre-crash levels and has continued to fall, changing hands at $62,665.08 at press time.

BTCUSD Chart By TradingView

Binance.US Flash Crash Explained

Some observers speculated that low liquidity was to blame for the flash crash on the American affiliate of the leading global crypto exchange.

“http://Binance.us had a lack-of-liquidity flash crash this morning. $BTC fell to $8200 for 1 min. I explained why on Youtube (not glitch; per confidential source). Good learning experience on exchanges. (PS: Doesn’t affect my bullishness on $BTC; just an exchange failure).“

But according to Binance.US, the crash was triggered by a bug in the trading algorithm of one of its institutional customers. In a statement shared with Bloomberg, the exchange stated:

“One of our institutional traders indicated to us that they had a bug in their trading algorithm, which appears to have caused the sell-off.”

The exchange says they are continuing to investigate the matter, but the trader in question has fixed their bug, hence resolving the issue. 

At the moment, it’s not clear whether any traders incurred losses from the flash crash and, if so, whether Binance.US intends to reimburse them.

Source: zycrypto.com

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