Bitcoin Price Suddenly Crashes to $8,900 on BitMEX in Violent Flash Crash

The crypto markets were rocked late Monday by a shocking flash crash of Bitcoin’s price on the BitMEX exchange. In a matter of minutes, the value of Bitcoin plummeted from around $67,000 to $8,900 before rapidly recovering.

@syq reported that an enormous sell order of over 850 Bitcoins worth around $55 million on the BitMEX BTC/USDT trading pair triggered the dramatic plunge. A single trader, often called a “whale” due to their ability to wildly sway markets with outsized transactions, dumped this massive amount of Bitcoin. This coordinated dump swamped the order books and abruptly caused Bitcoin’s price to collapse to $8,900 – its lowest level since early 2020.

Still ongoing. 850+ BTC, low of $8,900. pic.twitter.com/bAiPDDM9Vj

— syq (@syq) March 18, 2024

The violent flash crash isolated to just the BTC/USDT trading pair on BitMEX still reverberated across crypto markets globally. However, as quickly as it plunged, Bitcoin’s price snapped back in a V-shaped recovery, rallying back to around $67,000 within an hour of the crash.

Bitcoin Flash Crash Is Caused by Whale Sell-Off

Crypto exchange BitMEX swiftly responded on social media platforms, particularly X, stating they were actively investigating the unusual whale activity behind the enormous sell order. The exchange assured traders that all user funds were secure and their trading platform operated normally.

“Bitcoin down to $8,900 on BitMEX?" Well, not quite the whole picture.

Yes, we are investigating potential misconduct by traders on our Bitcoin-USDT Spot market (👀Did you even know we offer Spot trading?)

However, this incident had NO impact on our billion-dollar derivatives… pic.twitter.com/qWXXnyQxjw

— BitMEX (@BitMEX) March 19, 2024

“We are investigating unusual activity in the past few hours involving a user selling large orders on our BTC-USDT Spot Market,”

As details of the $8,900 flash crash on BitMEX began spreading, crypto traders and enthusiasts on social media went into an absolute frenzy. Frenzied discussions and speculation broke out across platforms like X as market participants tried to make sense of the bizarre and violent price movement.

Many traders alleged the outsized sell order was an intentional market manipulation by a wealthy Bitcoin whale. The unsubstantiated theory claimed the whale deliberately crashed the market to buy cheaper Bitcoin before allowing the price to recover quickly.

While not the first instance of a violent flash crash disrupting Bitcoin’s price, the incident raises fresh concerns about the potential for whales to wreak havoc and manipulate crypto markets through oversized trading activities. BitMEX’s investigation aims to clarify what caused the bizarre price action.

Unfortunately, violent price swings and flash crashes in crypto are nothing new. However, an enormous $55 million dump that briefly crushed Bitcoin’s price by over 85% is among the more extreme and disruptive cases seen in recent memory. The risky and unregulated nature of decentralized crypto markets leaves them vulnerable to such destabilizing events from whales and nefarious players.

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