What Could Have Caused Bitcoin to Flash Crash On Sunday?

wxa7115

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Quote from: milewilda on April 27, 2021, 03:43:11 PM

Quote from: wxa7115 on April 27, 2021, 11:08:42 AM

Quote from: Oceat on April 23, 2021, 05:53:26 PM

For me, it's not bearish yet, there are circumstances that actually affect the crypto market and one of the reason is the hashrate drop. This massive correction may be normal or common to someone but with the that actual drop after Bitcoin reached the $64k ATH. I think someone is dumping their holdings that resulted in this huge decline in the market.

While some news are adding fuel to the fire to make the market worst this is what the journalist doing these days to catch attention, they need to make FUD to the current situation.

And the evidence is proving you right, people rush to make all kind of conclusions about why the market behaves the way it does and why the price went down not realizing this tells us more about themselves than about the market.

This is nothing more but a trick of the whales, they are trying to shake out the weak hands and get their bitcoin, if you sell now then you are going to miss on the explosive growth that will come at the end of the year, so people need to be strong and hold their coins no matter what because if the do not then they will see bitcoin reaching new heights and they will have no bitcoin to take advantage of the situation at the time.

Market had always been like this and if you've been here for a while then you can determine on what are those movement been made of, you can eventually point out some sort
of manipulative movement if you do really see and check the fundamentals.It might a little bit lit but its there and as a small fry investor then you should know on how to ride
with the waves for your own benefit rather than on trying to go against with it.There are really news that do pops out from nowhere unexpectedly then after that the
market do mainly reacts but its not guaranteed thats why you should really be that attentive on what further actions you would do.

And there is no reason to think this is going to change, whales exist in any market and they can move the market as they please, in fiat markets there are some restrictions to their movements but if several of them act at the same time they can still move the markets.

However in a market that is unregulated as this one their power can be exercised more freely and they can take advantage of it in an easier way, so people need to always look at the market and think if what we are seeing makes sense, and if it does not then most likely we are in a movement where the whales are manipulating the market to their benefit, and what better evidence this is the case than the crash we saw and the fact bitcoin recovered almost immediately proving this was a movement of the whales to scare people out and get their coins for cheap.

dautuonline

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Quote from: BITCOIN4X on April 24, 2021, 02:07:43 PM

Quote from: DrBeer on April 24, 2021, 07:11:47 AM

Already in many sources they explain:
1. Power outages in the Chinese province of Xinjiang, which led to the loss of many industrial miners from the network, began on Friday, but this effect fully manifested itself later.
2. At the same time, there were still unconfirmed rumors that US regulators may start an investigation into unnamed large financial institutions for money laundering in cryptocurrencies. This led to a panic in the market and a massive liquidation of positions on the exchanges. Bitcoin was above $ 62,000 on Saturday morning, and set a local low of about $ 51,500 early on Sunday morning.

Two reason that might be confirmed as the cause of the decline in bitcoin price this week. But for whatever reason, I don't think bitcoin need good news or bad news to go up or down as it's a free market and it's up to the trader himself. The trader panic lasted for a moment before everything recovered.

binance also maintained at the same time after the incident. a certain conspiracy theory

milewilda

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Quote from: wxa7115 on April 27, 2021, 11:08:42 AM

Quote from: Oceat on April 23, 2021, 05:53:26 PM

For me, it's not bearish yet, there are circumstances that actually affect the crypto market and one of the reason is the hashrate drop. This massive correction may be normal or common to someone but with the that actual drop after Bitcoin reached the $64k ATH. I think someone is dumping their holdings that resulted in this huge decline in the market.

While some news are adding fuel to the fire to make the market worst this is what the journalist doing these days to catch attention, they need to make FUD to the current situation.

And the evidence is proving you right, people rush to make all kind of conclusions about why the market behaves the way it does and why the price went down not realizing this tells us more about themselves than about the market.

This is nothing more but a trick of the whales, they are trying to shake out the weak hands and get their bitcoin, if you sell now then you are going to miss on the explosive growth that will come at the end of the year, so people need to be strong and hold their coins no matter what because if the do not then they will see bitcoin reaching new heights and they will have no bitcoin to take advantage of the situation at the time.

Market had always been like this and if you've been here for a while then you can determine on what are those movement been made of, you can eventually point out some sort
of manipulative movement if you do really see and check the fundamentals.It might a little bit lit but its there and as a small fry investor then you should know on how to ride
with the waves for your own benefit rather than on trying to go against with it.There are really news that do pops out from nowhere unexpectedly then after that the
market do mainly reacts but its not guaranteed thats why you should really be that attentive on what further actions you would do.

JimboToronto

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Idiot leverage gamblers were being liquidated.

wxa7115

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Quote from: Oceat on April 23, 2021, 05:53:26 PM

For me, it's not bearish yet, there are circumstances that actually affect the crypto market and one of the reason is the hashrate drop. This massive correction may be normal or common to someone but with the that actual drop after Bitcoin reached the $64k ATH. I think someone is dumping their holdings that resulted in this huge decline in the market.

While some news are adding fuel to the fire to make the market worst this is what the journalist doing these days to catch attention, they need to make FUD to the current situation.

And the evidence is proving you right, people rush to make all kind of conclusions about why the market behaves the way it does and why the price went down not realizing this tells us more about themselves than about the market.

This is nothing more but a trick of the whales, they are trying to shake out the weak hands and get their bitcoin, if you sell now then you are going to miss on the explosive growth that will come at the end of the year, so people need to be strong and hold their coins no matter what because if the do not then they will see bitcoin reaching new heights and they will have no bitcoin to take advantage of the situation at the time.

CaVO32

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Quote from: 2double0 on April 25, 2021, 04:13:16 PM

So it is about the weekend dumps that I have always seen btc dumping a bit on Sundays but now I see it below 48k which is not good and if it goes more down to liquidate longs that were in the trades since $45k, btc has more chances of dipping back to $20k once before it goes up again as there is too much negativity about the taxes that will be levied on Americans and I heard that the pandemic situation is not good there at all, so all this is in combined breaking btc through a flash crash even now. 47k is the key area looking to be a very strong support for btc that the buyers don't let it be touched by bears. I hope btc continues its rise and does not end the show in a 2018 flash crash way.

I don't think we will go down as much as 20k. I just hope that we will not go down below 40k. But we can't do anything much if the market is heading that way. There are so many factors that contributed to this drop. But with the backing of financial institutions and big companies, I don't think we will see a massive drop this time. Maybe, it is just a correction because we have been enjoying too much about the rise of btc in the first quarter of this year. Let us wait and see...

2double0

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So it is about the weekend dumps that I have always seen btc dumping a bit on Sundays but now I see it below 48k which is not good and if it goes more down to liquidate longs that were in the trades since $45k, btc has more chances of dipping back to $20k once before it goes up again as there is too much negativity about the taxes that will be levied on Americans and I heard that the pandemic situation is not good there at all, so all this is in combined breaking btc through a flash crash even now. 47k is the key area looking to be a very strong support for btc that the buyers don't let it be touched by bears. I hope btc continues its rise and does not end the show in a 2018 flash crash way.

beerlover

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Quote from: DrBeer on April 25, 2021, 07:29:09 AM

Quite an interesting addition, to be honest I did not know about the change in tax rates! In the presence of such a factor, it becomes logical to "drain bitcoin", and in fact fix tax deductions so as not to lose on taxes in the near future. Moreover, in numerical terms, the rebound was just recorded at the border of about 15%, and the price does not fall below, so as not to "cross the line" where the losses due to the fall in the exchange rate will exceed the losses from the growth of tax deductions.

Oh hello Dr.Beer! This is Beer Lover here! Cheesy

. I do think that was the biggest reason, take your bitcoins out, turn them into cash, take out your profit, put the capital back in and pay the taxes on your profit if you want to and move on. This way they are saving a lot of money from the new tax when it comes, what better reason there could be?

And let's remember USA may not be the number one nation with crypto population right now (or maybe, I really don't know) but they are a very wealthy nation, they have most of the billionaires and they have the biggest companies, so there must be a lot of known and unknown crypto investors who will have to pay huge sums of tax, even at the current level, with the new tax hike, it will cause even more, nearly half of your profit after the first million goes to tax. Which is why it makes sense to cash out. Wish they didn't, wish the rich paid their fair share, but let's be honest if I made over a million dollars profit, I would be doing the same as well.

DarkIT

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It was common phenomenon in the cryptocurrency. But their will be some reason behind it.The reason for current one is the US move over a cryptocurrency and his transaction.It was hard to predict the move of United States.The last man fear made the US people to sell at less price to get into safer side.At the last the price of bitcoin was loss upto 14k$ and it was stable over a week.

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Quote from: onecall123 on April 25, 2021, 08:58:54 AM

Suppose Biden imposed 43% tax rate. So, let's sell out Bitcoin now to stay away from high tax we need to pay all those massive future gains. How this can be a solution? Point to be noted, this is what drove Bitcoin below $60K.

Really that you mean ? I don't see proposal for tax increase or increase itself causing hodlers to dump hodling. An increase in tax is suppose to cause more hodling and pump because of the fear of being taxed when you make income from the sale of bitcoin. This is suppose to be a regulation just like fiat printing and increase or decrease in loan can be used to control inflation and devaluation.

onecall123

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Tax concerns have long waited proposal on the cryptocurrency sector, the recent Joe Biden’s tax plan leading the sell-off, and pushing bitcoin below the $50,000 mark. According to their plan, capital gains tax would rise to 43% for high income earners, but right now which is 30% tax rate.

Suppose Biden imposed 43% tax rate. So, let's sell out Bitcoin now to stay away from high tax we need to pay all those massive future gains. How this can be a solution? Point to be noted, this is what drove Bitcoin below $60K.

DrBeer

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Quote from: beerlover on April 24, 2021, 04:01:43 PM

Quote from: DrBeer on April 24, 2021, 07:11:47 AM

Already in many sources they explain:
1. Power outages in the Chinese province of Xinjiang, which led to the loss of many industrial miners from the network, began on Friday, but this effect fully manifested itself later.
2. At the same time, there were still unconfirmed rumors that US regulators may start an investigation into unnamed large financial institutions for money laundering in cryptocurrencies. This led to a panic in the market and a massive liquidation of positions on the exchanges. Bitcoin was above $ 62,000 on Saturday morning, and set a local low of about $ 51,500 early on Sunday morning.

Do not forget that the higher taxes (much higher) on the rich also became a problem for the crpto people who sold and profited right away so they can pay the current tax rate on their income before the new tax rate comes. If you profit from crypto right now you pay %30 tax rate and if you do it after the new tax comes in that is 43% that is a lot of difference.

Considering this works for 1+ million dollar profits, that means that many very rich people realized their profits now so that they can reenter later on with whatever they want or maybe not even reentered the market. That is a reasonable approach, if I had that much money I would have done the same but I believe I will never own 1+ million dollars in my life, unless something shocking happens it is not going to happen. This is why I think it is obvious that this played a role, not saying that was the whole thing, but it was one part of it.

Quite an interesting addition, to be honest I did not know about the change in tax rates! In the presence of such a factor, it becomes logical to "drain bitcoin", and in fact fix tax deductions so as not to lose on taxes in the near future. Moreover, in numerical terms, the rebound was just recorded at the border of about 15%, and the price does not fall below, so as not to "cross the line" where the losses due to the fall in the exchange rate will exceed the losses from the growth of tax deductions.

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Quote from: beerlover on April 24, 2021, 04:01:43 PM

Quote from: DrBeer on April 24, 2021, 07:11:47 AM

Already in many sources they explain:
1. Power outages in the Chinese province of Xinjiang, which led to the loss of many industrial miners from the network, began on Friday, but this effect fully manifested itself later.
2. At the same time, there were still unconfirmed rumors that US regulators may start an investigation into unnamed large financial institutions for money laundering in cryptocurrencies. This led to a panic in the market and a massive liquidation of positions on the exchanges. Bitcoin was above $ 62,000 on Saturday morning, and set a local low of about $ 51,500 early on Sunday morning.

Do not forget that the higher taxes (much higher) on the rich also became a problem for the crpto people who sold and profited right away so they can pay the current tax rate on their income before the new tax rate comes. If you profit from crypto right now you pay %30 tax rate and if you do it after the new tax comes in that is 43% that is a lot of difference.

Considering this works for 1+ million dollar profits, that means that many very rich people realized their profits now so that they can reenter later on with whatever they want or maybe not even reentered the market. That is a reasonable approach, if I had that much money I would have done the same but I believe I will never own 1+ million dollars in my life, unless something shocking happens it is not going to happen. This is why I think it is obvious that this played a role, not saying that was the whole thing, but it was one part of it.

Since this tax plan has such an uncertain future, I have trouble believing this is the reason bitcoin fell so dramatically. Who would sell an investment they believe in because a tax plan that is, at best, unlikely to pass was proposed? Further, the stock market didn't have a sell off of a similar magnitude, so it's unlikely this is rich people trying to lock in gains at a lower rate. If so, you would have seen a similar sell off in stocks.

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Quote from: DrBeer on April 24, 2021, 07:11:47 AM

Already in many sources they explain:
1. Power outages in the Chinese province of Xinjiang, which led to the loss of many industrial miners from the network, began on Friday, but this effect fully manifested itself later.
2. At the same time, there were still unconfirmed rumors that US regulators may start an investigation into unnamed large financial institutions for money laundering in cryptocurrencies. This led to a panic in the market and a massive liquidation of positions on the exchanges. Bitcoin was above $ 62,000 on Saturday morning, and set a local low of about $ 51,500 early on Sunday morning.

Do not forget that the higher taxes (much higher) on the rich also became a problem for the crpto people who sold and profited right away so they can pay the current tax rate on their income before the new tax rate comes. If you profit from crypto right now you pay %30 tax rate and if you do it after the new tax comes in that is 43% that is a lot of difference.

Considering this works for 1+ million dollar profits, that means that many very rich people realized their profits now so that they can reenter later on with whatever they want or maybe not even reentered the market. That is a reasonable approach, if I had that much money I would have done the same but I believe I will never own 1+ million dollars in my life, unless something shocking happens it is not going to happen. This is why I think it is obvious that this played a role, not saying that was the whole thing, but it was one part of it.

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As they have already mentioned, the power cuts in China, or the possible effect that US President Biden has implemented the Tax system, also a possible panic scenario due to the introduction of Coinbase Coin on Wall Street and for being in correction, but seeing it from a purely speculative point of view, I think that the decline of Bitcoin is due to the same market, due to the action of investors, perhaps people who want to buy Bitcoin are entering and the best way to buy Bitcoin is "cheap ", and for that they push the price down with" shorts "and when we check the" shorts "are open, maybe they want to take the Bitcoin from the people who bought at $64k and the best way is to cause panic.

BITCOIN4X

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Quote from: DrBeer on April 24, 2021, 07:11:47 AM

Already in many sources they explain:
1. Power outages in the Chinese province of Xinjiang, which led to the loss of many industrial miners from the network, began on Friday, but this effect fully manifested itself later.
2. At the same time, there were still unconfirmed rumors that US regulators may start an investigation into unnamed large financial institutions for money laundering in cryptocurrencies. This led to a panic in the market and a massive liquidation of positions on the exchanges. Bitcoin was above $ 62,000 on Saturday morning, and set a local low of about $ 51,500 early on Sunday morning.

Two reason that might be confirmed as the cause of the decline in bitcoin price this week. But for whatever reason, I don't think bitcoin need good news or bad news to go up or down as it's a free market and it's up to the trader himself. The trader panic lasted for a moment before everything recovered.

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Quote from: adnancypto049 on April 19, 2021, 10:39:18 PM

I am confused about the sudden dump of cryptocurrencies. can anyone explain that why this happen on Sunday?

It’s still unclear as to what might have led to the crash, but the main news that I have been seeing in the internet as to why the market dropped this low is because of a few reasons and the first one is something that has to do with US Treasury having plans to take actions against money laundering with cryptocurrencies. I don’t know if this might have truly triggered the market to start falling like this.

Then the next has to do with the next blackout that took place in China in the Xinjiang region, I have also seen posts where people were referencing Coinmarketcap and the rate at which has dropped due to the blackout.

DrBeer

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Already in many sources they explain:
1. Power outages in the Chinese province of Xinjiang, which led to the loss of many industrial miners from the network, began on Friday, but this effect fully manifested itself later.
2. At the same time, there were still unconfirmed rumors that US regulators may start an investigation into unnamed large financial institutions for money laundering in cryptocurrencies. This led to a panic in the market and a massive liquidation of positions on the exchanges. Bitcoin was above $ 62,000 on Saturday morning, and set a local low of about $ 51,500 early on Sunday morning.

qwertyup23

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According to this NEWS, President Biden's move to increase long-term capital gains tax led most of the traders to sell their stocks which also affected cryptocurrencies in general, to wit:

Quote

President Biden is expected to raise long-term capital gains tax for the wealthiest Americans to 43.4%, including a surtax. That would be higher than the top federal tax rate on wage income. The new tax rate would apply to returns on assets held in taxable accounts and sold after more than a year.

This triggered a sell-off in stock markets overnight, with all three major U.S. indexes ending Thursday’s session in the red. Analysts said fears over Biden’s capital gains tax proposal may be extending to crypto investors, who have had a great year with the price of bitcoin having climbed more than sixfold in the last 12 months.

To be honest, this could be a good opportunity for investors to purchase BTCs for either short or long-term investment. Since prices are down, fees are also low which could also be a good opportunity to acquire more.

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Quote from: jackg on April 19, 2021, 10:46:59 PM

There were two main theories I saw.
One was that mining rates dropped due to flooding in China which temporarily took out ~10-30% of the total hashrate.

This is the number one reason I think why that flash crash happened. I am on pc that time watching the 15mins timeframe of bitcoin. It's on $56k that time and in just a few minutes it went down to $50k. If this such events can happen then can they do it again in the future? What resultes for that flooding, why they are not able to prevent it.

Quote from: jackg on April 19, 2021, 10:46:59 PM

The second reason was due to a funding rate indicator on leveraged positions that said there were a lot of longs open and a high funding rate for shorts (meaning short term shorts were paying people to open them and leave them open). I assume that could then build into a bias if the market starts to get a bit stagnant.

This is reasonable but I don't think that can completely cause that flash crash. We could just dump for couple of days so it is a healty correction.

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