The history of the Flash Crashes in BTC, how to make money on itI'll start this post with what I've earned on the covid flash crash myself. This success was repeated in May 2021 but in other token.
That's why I know a little about it.
At the end I wrote why next flash crash is possible
Bitcoin and other cryptocurrencies often experience flash crashes when there are sharp and significant price declines for a short period of time. These events can be triggered by a variety of factors, including market panics, big selling, news, or regulatory changes. Here are a few known instances of flash crashes in bitcoin history :
The flash crash On June 19, 2011, the price of bitcoin dropped from about $17.50 to just $0.01 on the low-volume Mt.Gox exchange. The reason for this flash crash was a huge sales order to sell 2,000 bitcoins at the market price.
Flash Crash On April 10, 2013, the price of bitcoin plummeted from about $260 to $45 in a short period of time. This followed a series of crashes on the Mt.Gox exchange and a number of other factors that caused panic among traders.
Flash crash On June 21, 2017, the price of bitcoin on some exchanges dropped from about $2,800 to $0.10 in just a few seconds. This was caused by a technical malfunction on the GDAX exchange that led to the execution of a bitcoin sell order at a low price.
Flash Crash On September 17, 2019, the price of bitcoin on the Bitstamp exchange plummeted from about $10,000 to $8,100 in a short period of time. The reason for this flash crash was a large sale order for 5,000 bitcoins on the exchange.
Flash crash in 2020: On March 12, 2020, the price of bitcoin dropped by about 50% in a few hours, falling from about $8,000 to $4,000. This flush crash was caused by market panic related to the global COVID-19 pandemic and its impact on financial markets.
Flash crash in 2020: On May 10, 2020, the price of bitcoin dropped more than 10% in just a few minutes. This happened after bitcoin sales orders worth about $30 million were executed on the BitMEX exchange.
Causes of Flash Crashes
-Flash crashes, or sharp and brief drops in asset prices in financial markets, can be caused by a variety of reasons. Some of the main causes of flash crashes include:
-Automated trading systems: The use of computer programs and algorithms to perform a large number of trades can lead to a situation where these systems start selling assets automatically in response to certain market conditions. This may lead to a spike in sales and a sharp drop in prices, resulting in a flash crash.
- Market Liquidity: Lack of liquidity in the market, that is, the inability to quickly buy or sell assets without a significant change in their price, can contribute to the occurrence of flash crashes. When large numbers of investors are trying to sell assets at the same time and there are not enough buyers, prices may decline sharply.
- Systemic Failures: Technical failures and errors in trading platforms or settlement systems may cause flash cracks. Incorrect orders or execution of trades, delays in transmitting information, or problems with transaction processing may create volatility in the market and provoke sharp drops in prices.
- Market Emotions and Panic: Heightened nervousness, emotional reactions, and panic among investors can also contribute to flash crashes. If a significant number of investors start selling assets en masse due to fear and anxiety, it can cause a spike in sales and a sharp drop in prices.
What were some inefficiencies in the market that could be exploited in the financial markets
There are several instances in the financial markets where inefficiencies could be detected and exploited for profit. Some of these cases include:
-Arbitrage between different markets: If assets are traded on different markets or exchanges at different prices, one could buy an asset at a lower price in one market and sell it at a higher price in another market, profiting from the difference in prices. This is known as arbitrage.
-Mispricing Companies: Sometimes investors may mispriced companies' stocks, creating opportunities to buy undervalued stocks or sell overvalued stocks. Such valuation mismatches can create opportunities for profits.
-Temporary Price Mismatches: Sometimes there are temporary asset price mismatches in financial markets caused by panic, emotion or unforeseen events. If an investor is able to identify such mismatches and take appropriate action, he or she may profit from their correction.
Explore the last point
Temporary price mismatches in financial markets occur when asset prices deviate from their fundamental value for a short period of time. This can be caused by various factors such as panic, traders' emotional reactions, unexpected news or errors in trading algorithms.
Temporary price mismatches present opportunities for traders or investors to capitalize on the difference between the current price and the fundamental value of an asset. Some examples of timing mismatches in prices include:
Inefficiency of crypto exchanges: There can be differences in asset prices on different trading platforms, especially during volatile market conditions. Traders can exploit these differences to buy an asset at a lower price on one platform and sell it at a higher price on another platform, making arbitrage profits.
Use of Algorithmic Trading: Algorithmic trading systems can cause timing mismatches in prices. For example, if an algorithmic system triggers a large number of sell orders in a short period of time, it may cause the price of an asset to go down. Traders may try to take advantage of such situations to profit by entering buy positions when prices decrease due to algorithmic selling.
This is due to the fact that players who want to make money on Funding/Countdown and their ideal market is a flat and when the market moves, they simply leave the market and wait for a less volatile market. This is why there is a liquidity crisis on some exchanges and there is a price overshoot.
All signs of a flash crash, signaling as much as I can:
1.The exchanges also believed in the latest surge in trading volumes and are now going full steam ahead.
2.The crowd is sitting in coinlist and seals with potential profits.
3.The crowd is playing or holding memcoins.
4.Crowd sits in altcoins, which is "still cheap" and already near December lowes
5.No new steibles are released - no one from the outside is interested in crypto, those who wanted have already bought it
6. Bankfallls
7.FEDnow release
8.The subcycle in the global cycle I mentioned in other posts
That's why I recommend to register at different exchanges, to study and test different trading terminals
Best regards EXCAVO
