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Flash crash on Coinbase sends Bitcoin/Euro tumbling

Flash crash on Coinbase sends Bitcoin/Euro tumbling

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TL;DR

  • Bitcoin’s value against the euro plummeted by 23.7% on Coinbase, falling from €60,000 to €48,529, after reaching a USD high of $69,325.
  • The flash crash was notably more severe on Coinbase compared to Kraken, where the lowest price was €58,400.
  • The rapid recovery within ten minutes highlights the cryptocurrency market’s volatility and resilience to sudden price movements.

Bitcoin’s value against the euro took a dramatic downturn on Coinbase, dropping 23.7% amid a volatile trading period. This decline came just after the cryptocurrency reached a new U.S. dollar high of $69,325. The price briefly fell to €48,529 from €60,000 on Coinbase, contrasting with the smaller dip observed on Kraken, where the price dipped to €58,400.

BTC/EUR trading pair on Coinbase. Source: TradingView

The reason behind this sudden price drop remains unclear, but it took approximately 10 minutes for Bitcoin’s value to realign with euro trading pairs on other exchanges. Flash crashes like this one are not uncommon in the digital currency market and are usually attributed to factors such as liquidity shortages or trading errors. 

A liquidity shortfall occurs when market sell orders overwhelm available buy orders, forcing prices down to the next substantial buy order level. Alternatively, trading errors, often referred to as “fat finger” mistakes, involve significant unintentional trades by humans or algorithms that can lead to rapid price declines.

This flash crash underscores the volatility inherent in the cryptocurrency market, especially for a widely traded asset like Bitcoin. The incident occurred in the wake of Bitcoin achieving a record high in USD value, which was followed by a quick reversal of gains, dropping below $64,000 at one point.

Flash crashes, while abrupt and alarming, often correct quickly as the market stabilizes and prices return to levels supported by underlying buy orders.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Damilola Lawrence

Damilola is a crypto enthusiast, content writer, and journalist. When he is not writing, he spends most of his time reading and keeping tabs on exciting projects in the blockchain space. He also studies the ramifications of Web3 and blockchain development to have a stake in the future economy.

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