Bitcoin suddenly plummeted to about $24,111 on the BTC/USD1 trading pair on Binance before quickly rebounding to $87,000 within seconds.
The move does not appear to be related to the launch of the $1 stablecoin by Trump family-backed World Freedom Financial Corporation, according to exchange data.
Source: Binance
This type of “flashing wick” occurs when liquidity is thin and the order book loses depth. The BTC/USDT trading pair remains stable after recovery.
During off-peak trading hours, when market makers frequently pull back, large buy/sell orders can sweep multiple open positions. This situation can produce a dramatic spike that looks like a market breakout.
Furthermore, the instant reversal in the wick suggests that there are no broader market moves supporting the rise.
“Many spot investors find themselves in a similar position to before the flash crash,” cryptocurrency analyst and The Coin Bureau co-founder Nic Puckrin told Cryptonews.
“That’s certainly an argument against over-leveraging in a market with volatile liquidity in such an uncertain geopolitical environment.”
In addition, temporary pricing issues can also cause such confusion. These price fluctuations are often caused by erroneous quotes or the reaction of trading robots.
Experts often emphasize that a true rally requires sustained buying pressure and increasing volume. In this case, trading volume remains low and the price quickly returns to its previous levels.
Bitcoin rose 0.89% to $87,693.65 in the past 24 hours, outperforming the broader cryptocurrency market (+0.83%). The cryptocurrency has fallen sharply from its October peak of over $126,000. According to CoinMarketCap data, as of press time, the largest digital asset was trading at $87,773.
Analysts say that Bitcoin is currently consolidating within a descending “triangle pattern” and is trading below the 21-day moving average, which is a resistance level. A clear breakout or breakdown will confirm the next move in the direction.
Read original story “Bitcoin Sparks Sharp Flash Crash on Binance USD 1 Pair, Drops to $24,000” by Sujha Sundararajan on Cryptonews.com