Bitcoin [BTC] price was going through an overwhelming run looking to close to $14000. However, like Icarus flew too close to the sun, this run was affected by a massive drop in volume instantaneously. Coinbase Exchange went down inadvertently causing a 14% drop ( about $2000) in less than an hour.
Here’s How it Happened
At 20: 47 Hours, Coinbase reported an issue of degraded performance. The price of Bitcoin had already dropped for by 12% more than 15 minutes before the announcement.
Before 20: 15 Hours UTC on 26th May 2019, Bitcoin was trading above $13800, and it was during a hot run from $12800 to break above $13800. The FOMO was just about to drive Bitcoin to new yearly highs. When the incident occurred. Ran Neuner, the host of Crypto-Trader tweeted,
Coinbase, you ruined the whole party!
— Ran NeuNer (@cryptomanran) June 26, 2019
Later at 21: 38 Hours UTC on 27th May 2019 it announced that the issue was resolved. However, the price had recovered almost as fast as it dropped. The instant decrease in volume was during an inflection point was probably the reason why it happened.
Peter Brandt, a chart analyst, and trader tweeted,
It type of thing happens usually when an exchange wants to take advantage of its customers. He also said, “Talk about volatility. The break today in BTC would be the equivalent of the S&Ps dropping 500 points — in 90 minutes.”
Moreover, it also exposed the extreme volatility in Bitcoin. A drop of $2000 in less than 15 minutes would usually signify a huge trend reversal or fundamental adversity. Nevertheless, it is also an indication of how FOMO was kicking in as the activity of Exchanges is increasing rapidly.
Bitcoin’s price has recovered trading above $12k. The price of Bitcoin at press time is $12730. It is trading 6.11% higher on a daily scale.
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Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com