Ethereum Dropped to 10 Cents from $365 | Let's Find Out How !
![Ethereum-e1443474189558.png](https://steemitimages.com/DQmWiXYfSPDg4kSkinxF2tdqA6EQUDWAbupqxKUz2RU1hU2/Ethereum-e1443474189558.png)
Markets for Ether, the cryptocurrency connected to the Ethereum (ETH), were stunned yesterday by an enormous flash drop that saw costs fall from over $365 right down to as low as 10 cents on one exchange before bouncing back shortly, an event that's gently worrying for anyone involved regarding cryptocurrency volatility, this has had devastating consequences for a few skilled traders who have seen their holdings drained.
The crash came at about 3:30pm ET Thursday, when a large sale of Ether was going on the GDAX Exchange, an improved version of the popular Coinbase Exchange and Cryptocurrency wallet geared towards skilled traders. As per GDAX's official statement, one and yet unknown actor sold-out Millions of dollars worth of Ether across a variety of positions from $317 right down to $224, which means that ether was trading at the lower end of the normal range.
The motive of this drop in trading price was to trigger variety of stop loss orders feature by which a trader's holdings can automatically be sold-out once the value dips below a particular marker. Which in turn, these new sales drove the value lower, triggering further stop-loss orders in a very descening impact. The lowest , Ether was trading for $0.10 per unit
The process was even more painful for the numerous traders who were engaged in margin trading, a feature that GDAX had just launched on its Exchange since March. In margin trading, traders are allowed to place buy and sell orders for larger sums than they have in their accounts, multiplying the potential size of both the profits and losses. As per the support documents on the site of GDAX, it has offered margin traders up to 3x leverage for the USD/ETH trading combined, that means somebody with solely a $1,000 account balance can purchase or sell out up to $3,000 of Ether
But as a precautional measure, Margin Trading accounts are set to automatically liquidate so as to keep up the money borrowed (sell out all ether quickly) if losses exceeded a particular amount, a feature known as “Margin Calling." With the crash happening so quick, traders were margin called almost instantly, and in some cases saw their entire holdings sold-out at terribly low costs before they might react—selling, say, 100 ETH at $2 to cover simply a couple of hundred dollars' loss, right before the market bounced back to nearly $300/ETH once more.
GDAX has tweeted that it is investigating the trading activity and will update its customers when they get some information
That's LIFE! ;) NeverMind! Everyting Possible in Crypto Land.... What A Pitty I had no Buy Order at 10 cents there... ;) <3
I read somewhere that it was something technical with an ICO going bad ?
The Investigation is going on Stay tuned for future Updates
I am currently holding my ETH
Great Decision :)