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What Caused a Flash Crypto Crash to Wipe $15 Billion Out in Just Two Hours

Avatar Martin Young 2 years ago

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Markets are falling, altcoins getting hit hardest are EOS, Iota, Ontology, OmiseGo and Icon.

That ongoing sideways ranging market has finally ended a few hours ago when a flash crash wiped $15 billion out of crypto in a couple of hours. The markets have slid over 6% over the past day and the bears are selling with a fury. Currently at a total capitalization of $324 billion markets have fallen fast from yesterday’s level of $345 billion.

Bitcoin led the downward charge when it shed $300 in just over an hour starting at 06.45 UTC. It has lost 4.5% on the day and is currently trading at $7,330. Volume has remained a steady $4.2 billion and market cap for BTC is currently $125 billion, down $6 billion from the same time yesterday.

In an opposite correlation to last year, all cryptos are tied together so when the big one falls they all do, but harder. Ethereum mirrored the movements of BTC and slid 5%, dropping $25 in a couple of hours. ETH price has been floating between $580 and $620 for over a week now but that has broken down as it dropped to a new weekly low of $575 at the time of writing.

Ripple in third spot fell 5.2% in the same short period falling from $0.67 to $0.61 as almost $1.5 billion was removed from Ripple’s market cap. Its satoshi levels did the opposite for a while and jumped as Bitcoin commanded the selloff but these have now fallen back in line and XRP is trading at around 8750 satoshis.

The biggest fall in the top ten cryptocurrencies has been Iota which has lost almost 12% on the day sliding from $1.74 to $1.53. $600 million was wiped out from Iota’s market cap as it fell from $4.8 billion to $4.2 billion in a few hours. Also taking big hits at the moment is Bitcoin Cash down 7.8%, EOS down almost 9%, Cardano down almost 8%, Ontology losing over 10%, OmiseGO with 9% lost, and Icon Zilliqa and Aeternity all falling over 9% on the day.

What has caused the Flash Crash?

There is some speculation as to what caused this flash crash. Some are fingering the US Commodity Futures Trading Commission which has subpoenaed several large exchanges including Coinbase, Kraken, and Bitstamp in an ongoing price manipulation investigation.

News is also emerging that South Korean crypto exchange CoinRail has just been hacked though this exchange is currently ranked 90th in the world with just $2.6 million in daily trade volume according to Coinmarketcap.

What we have seen time and time again is that when key support levels are broken markets fall fast. Whether these two developments have directly caused this selloff remains to be seen, the news has generally been positive over the past week or so.

Today is just another example of this volatility that crypto traders have now become accustomed to. Happy ‘Red Sunday’.

Martin Young

Martin is a Southeast Asia based info-tech, cyber security, and cryptocurrency analyst with 20 years working in web technology and media.

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