Ethereum Flat Crash - Why ? Who ? and How could you have profited from it ?
As we all know there was a Ethereum crash in the market on 21st June. Though people consider this as a Massacre , I think of it as a brilliant opportunity which could have helped me buy cheap Ethere !
But before getting into details I would like you to know Why did it happen ? and Who Caused it ?
As much as its difficult to believe there is just 1 person/order responsible for this crash - somebody sold 39,300 ETH !
GDAX a well know exchange had this order and when this transaction started execution all the existing ETHER sell orders started getting executed, from the top to down below - All the sell orders started a downwards spiral. Moreover People who do marginal trading have an advance feature called "Stop Loss", which further accelerated this - what this feature does is essentially helps traders avoid major loss by selling a particular amount in case the price drops significantly over a very short period of time.
For instance if ETH Price was 300$, so some traders would have placed stop loss order somewhere around 270$. so that in case the market goes down significantly, their losses are minimized. And most of the time it works as market drops and rise are quite incremental.
Ethereum Chart on 21st June :
However as soon as this order went through prices started to correct. Now you could also use this to your advantage, buy placing buy orders for lower prices, in the sanapshot below I have placed an order to buy 5 ETH at the cost of ~100 usd which seems a good enough bet ! For people who had placed some orders few months back and had forgotten about it there orders got executed and bought cheap ETH.
being realistic here - I'm not expecting it drop to 110 cents again so placing a bet for 100 USD seem much more logical.
Do note that you will have to maintain this balance in order to lock this transaction. So if your bitcoin is just sitting away wouldn't it be better to just lock some small amount in a transaction.
Happy Investing !