Ripple (XRP) - Flash crash on Bitfinex

in #crypto3 years ago

A "flash crash" is a sudden collapse of the price of an asset, caused by a very large sell order. This type of event is not uncommon in the free market cryptocurrency. Yesterday, it was Ripple (XRP) who had his first flash crash, because of the massive sale of a mysterious trader.

Although Ripple is one of the most liquid cryptocurrency on the market, its price is not protected from the impressive fluctuations that can be caused by massive sales on a particular platform. In this case, it is Bitfinex , where a sudden sell order caused a very rapid drop in the price of XRP: in a matter of seconds, the XRP went from $ 0.80 to 0.49 $ .


Allegations about the manipulation of the XRP price have not been long, and many commentators suspect some "whales" (traders with large cash) want to keep the price of the token below the symbolic dollar .

Nothing can confirm these allegations. Even if this movement of the market is clearly unusual, it is enough that the order book is not provided in order of purchases to drastically lower the price, by selling a large volume at the market price. The "stop loss" traders then trigger cascades, dropping the course all the faster.

The instant price increase comes from the fact that the order book is then empty on the "sale" side, and the redemption orders propel the price to its previous level.

This type of event reminds us that the prices of cryptocurrencies are subject to very high volatility, even if the markets are very liquid, as in the case of Ripple, third cryptocurrency in terms of overall capitalization.

Posted from my blog with SteemPress :


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