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Newsflash: Bitcoin Price Crashes to $6,400 Triggered by Massive $35 Million Sell Order

Joseph Young
Bitcoin price just dropped nearly 18 percent. | Source: Shutterstock

By CCN: On May 17, within minutes, the bitcoin price plummeted from around $7,800 to $6,400 in a flash crash, recording an unexpected 18 percent drop.

bitcoin price drops to $6,400

The bitcoin price briefly plunges to $6,400, recovers swiftly (source: coinmarketcap.com)

The sudden decline in the bitcoin price led the valuation of the crypto market to plunge from $257 billion to $225 billion, by more than $32 billion in less than 24 hours.

What triggered the sudden bitcoin price drop?

According to researchers and investors including Su Zhu, the CEO at Three Arrows Capital, and Eric Conner, a product developer at Gnosis, the bitcoin price plummeted as soon as a several thousand bitcoin sell order was placed on Bitstamp.

Zhu said:

BitMEX wicked down to $6,400. 2,000 BTC+ sell wall on Bitstamp absorbed. Looks like a mark price exploit by placing a large sell on stamp (1 of 2 oracles for mark on BitMEX) to trigger liquidations on BitMEX. You would’ve been fine on lvg long on Bitfinex which didn’t go below $7,000.

Speaking to CCN in an exclusive interview, Zhu explained that investors may have taken advantage of the Bitstamp API, which then led contracts on BitMEX to become liquidated as the bitcoin price plunged.

Read the full story on CCN.com.