Why does such a sudden price spike happen? - page 2.

Rampagoe004

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Quote from: Synchronice on September 14, 2024, 09:25:45 AM

As you guys know, there was a Matic token swap to Polygon on Binance and other exchanges. Yesterday, Polygon got listed again on Binance but there was a sudden, unusual behavior. Matic's price was nearly 0.39 USD and someone paid up to 1 USD per token and then the price went down to normal price again.
This isn't something new of course, I have seen it many times but I don't really understand why such spikes happen. Why would someone pay $1 on Matic when he or she could buy tons of it for only $0.39?

Every freebie like this often happens in the market, not only on Binance. If you look at the crypto market, this is nothing new. The analytical graph which has the potential to rise suddenly without realizing it in the near future will decline drastically because the crypto algorithm is not in line with the predictions according to the analysis. It's not a rare thing that candles change all the time, especially when new coins appear on the sales exchange. Most beginners when they see something like this panic and rush to take action, I think this is something that normally happens on large exchanges like Binance.

JeffBrad12

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some people chasing market price at the first second of listing where there's not even that much supply to begin with, as a result their buy order hits the ceiling price, it's very normal occurrence in a new market where there's still no equilibrium, you would expect that some people are just that hasty in making decision.

you'd see same thing in every newly open pair, heck even in twitter there were times when the exchange's side exposed selling coin at really high price taking advantage of this loophole.
the crypto market at the first minutes of opening is always wild west, it's pure price swing that could go from up 500% all the way to minus 500%.

SmartGold01

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Quote from: Synchronice on September 14, 2024, 09:25:45 AM

As you guys know, there was a Matic token swap to Polygon on Binance and other exchanges. Yesterday, Polygon got listed again on Binance but there was a sudden, unusual behavior. Matic's price was nearly 0.39 USD and someone paid up to 1 USD per token and then the price went down to normal price again.
This isn't something new of course, I have seen it many times but I don't really understand why such spikes happen. Why would someone pay $1 on Matic when he or she could buy tons of it for only $0.39?

Click on image to zoom

I think this is usually from the project owner to attract more attention to people while it got listed, what you should know is that this is something very common to exchange especially with centralized exchange. I could also remembered then when a coin I was holding spike to something else and it was a dream to me and I kept asking why didn't I placed a sell order when they opened deposit as then include had made some x before the price drop to the original price or a more stabilized price.

BitMaxz

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How exactly did you know that some guy bought it for $1?
Honestly, this is normal for newly listed coins someone could set a limit sell order at $1 like others said above market makers are the ones who set it at $1 and since it's not only one guy other market makers will fill the gap as a sample I put a limit sell order at $1(Not the average price of matic from all exchanges) and you put a limit sell order at $0.5 in just a few seconds until someone again fills the gap of $0.39 then that's a spike.
So it's normal for a newly listed coin and if someone bought it at $1 price then the one who made already made a profit but filling these gaps is pretty fast since there are many traders on Binance.

Zaguru12

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Quote from: BABY SHOES on September 14, 2024, 04:14:10 PM

Now this was my question before... Yeah have seen this a few times on other altcoins is this some kind of bug or manipulation?

I'm not familiar with how the market works like this so it's a bit ambiguous for me, maybe someone can enlighten me in detail so I know the reason behind it.

Sometimes btc is sold at a very low price from the normal market price? Is that someone doing that?

Most at times people usually attribute it to sales by bots but the sharp drop of this is not even caught by the boys as we put them to be. The valid reason I think is when the tokens are given to exchanges with their own given tokens as liquidity included the exchange list it at that ATH and to avoid the sale at this price by many investors they quickly withdraw or sell off their own. This is similar to when shitcoins that are built on the decentralized exchanges are rugged.

The price fall off sharply when a large amount of the token is taking off and with the speed at which this happens it is only the developers or the exchange that can pull this off. So I think it is the withdrawal of some liquidity to Fend off any mass sell that will totally crash the token to zero that is the reason

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Quote from: BABY SHOES on September 14, 2024, 04:14:10 PM

Sometimes btc is sold at a very low price from the normal market price? Is that someone doing that?

Of course there is, someone coming in with hundreds of bitcoin can do that on one exchange especially if the orderbook is low. This has happened to centralized exchanges before, but I forget what the name of the exchange was.

For initial listing prices, long candles are always present. It only ranged for a few miliseconds, who knows what exactly happened but I think it was just a momentary spike in the hot zone. You can notice when binance will open trading on a new asset coming to their exchange, look at the first candle because I'm sure the long green candle will be there.

BABY SHOES

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Now this was my question before... Yeah have seen this a few times on other altcoins is this some kind of bug or manipulation?

I'm not familiar with how the market works like this so it's a bit ambiguous for me, maybe someone can enlighten me in detail so I know the reason behind it.

Sometimes btc is sold at a very low price from the normal market price? Is that someone doing that?

Hamza2424

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Quote from: Synchronice on September 14, 2024, 09:25:45 AM

As you guys know, there was a Matic token swap to Polygon on Binance and other exchanges. Yesterday, Polygon got listed again on Binance but there was a sudden, unusual behavior. Matic's price was nearly 0.39 USD and someone paid up to 1 USD per token and then the price went down to normal price again.
This isn't something new of course, I have seen it many times but I don't really understand why such spikes happen. Why would someone pay $1 on Matic when he or she could buy tons of it for only $0.39?

Hmm, this is not one of the rare events it's quite usual, whenever a coin gets listed a battle between the buyers and sellers gets started due to high volume and liquidity, sot hat the reason such huge spikes appear, in more than 90% of coins you can see such spikes and even in more.

If it is only concerned with spikes, not with the initial ones there can be several reasons, Platform Manipulation, Whale activity, short-term squeezing, and Events boost. But all of this happens with the change in volume and liquidity of any particular coin.

SquirrelJulietGarden

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Quote from: Synchronice on September 14, 2024, 09:25:45 AM

This isn't something new of course, I have seen it many times but I don't really understand why such spikes happen. Why would someone pay $1 on Matic when he or she could buy tons of it for only $0.39?

This is not new and I only surprised that why you waited a long time to ask this question.

My answer can be wrong, but correct me if anyone feels it is wrong. This dumping candle can be explained like at the start of trading, of this trading pair, the company team sets up that sell order, and self-fills it by their small buy order. The order size can be small like a minimal amount on Binance, I remember it is $10. Then they let it has a free fall to lower price range, it is easy.

I don't know about Binance, but on other exchanges (smaller than Binance), when you want to list your coin on their exchanges, you will need to have fund requires for liquidity: the token and a stable coin, if the trading pair for listing is token / stable coin. You know with this available token and stable coin, the project team can do such fake candle easily.

Charles-Tim

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Quote from: Synchronice on September 14, 2024, 09:25:45 AM

Matic's price was nearly 0.39 USD and someone paid up to 1 USD per token and then the price went down to normal price again.
This isn't something new of course, I have seen it many times but I don't really understand why such spikes happen. Why would someone pay $1 on Matic when he or she could buy tons of it for only $0.39?

Your chart is 15 minutes chart. I want to use 1 second chart but it was difficult for me to scroll back to the beginning of the chart. So I use 1 minute chart. If you use 1 second chart, you will still notice something similar that it would be done in a way that no one will neither gain nor lose.

That price increase will occur at the start of trading and it is fake than what the exchanges let you see. Nobody will be able to buy and sell at that high price.

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Quote from: Synchronice on September 14, 2024, 09:25:45 AM

This isn't something new of course, I have seen it many times but I don't really understand why such spikes happen. Why would someone pay $1 on Matic when he or she could buy tons of it for only $0.39?

Short answer due to the thin liquidity on the orderbook.

This kind of price fluctuations occur if a huge market order was initiate while the orderbook doesn't have enough liquidity to absorb it. This cause a temporary price fluctuations that later on correct since the market maker will fill again order on the orderbook to correct the price.

This is common on tokens that has a surge volume of buyers that want to guy first or some deep pocket trader use market order in panic while they use a huge capital.

Dr.Bitcoin_Strange

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Quote from: Synchronice on September 14, 2024, 09:25:45 AM

Why would someone pay $1 on Matic when he or she could buy tons of it for only $0.39?

This is not actually the first time that this kind of trades is taking place, it usually happen especially on binance exchange as I have observed it a few times. As of last year, there was also a spike in the price of Bitcoin where some sold for a very high price (more than 30%) of the current price, I believe it's the buyer that makes such mistake by setting a buy order at a high price and if there's also a seller's order that match that of the buyer, it's going to execute. Just uncommon mistakes that few people make at time.

Synchronice

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As you guys know, there was a Matic token swap to Polygon on Binance and other exchanges. Yesterday, Polygon got listed again on Binance but there was a sudden, unusual behavior. Matic's price was nearly 0.39 USD and someone paid up to 1 USD per token and then the price went down to normal price again.
This isn't something new of course, I have seen it many times but I don't really understand why such spikes happen. Why would someone pay $1 on Matic when he or she could buy tons of it for only $0.39?

Click on image to zoom

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