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Bitcoin (BTC), the leading cryptocurrency, flashed a staggering plunge below $25,000 on Christmas Day. As highlighted by a financial analyst, Jacob King, this crash occurred on the Binance BTC/USD1 trading pair.
What triggered Bitcoin flash crash?
According to King, the dip was a "flash crash," which means that it happened suddenly, with very few users noticing it before it recovered. Notably, this crash, which exceeded 70%, occurred only on the Binance exchange, not the entire cryptocurrency market.
For perspective, the incident does not mean that Bitcoin crashed across the globe, but it was an isolated case on Binance. It could have been triggered by low liquidity, large sell orders or liquidations of leveraged positions. These conditions may have resulted from fewer traders on the exchange at the time.
However, the crash below $25,000 did not last more than a few seconds before it rebounded back to $87,000. It is unclear if traders were able to quickly buy the coin at such a ridiculously low price before it rebounded.
Any purchase of Bitcoin on Binance during the dip would automatically give the investor over $62,000 per Bitcoin in unrealized profit.
Meanwhile, commenting on the same flash crash, DeFi researcher, OxNobler claimed that the dip was as a result of manipulation. He alleged that insiders went all in and quickly dumped the price to $24,000 to make a staggering profit from it.
Despite his claims of an insider job, OxNobler provided no concrete evidence to justify his allegations. Many in the community have dismissed his allegation as mere fabrication meant to create panic in the space.
Bitcoin’s price outlook
As of press time, Bitcoin is changing hands at $87,420.41, which represents a 0.7% increase in the last 24 hours.
CoinMarketCap data shows the coin has remained between a low of $86,411.80 and a high of $87,956.88 within this period. However, the trading volume remains low by a significant 34.28% at $21.67 billion.
The slight uptick in price comes as the hash rate declined by about 4%. History reveals that miner capitulation has often preceded the price rebound of the coin. This occurs as weaker operators quit the scene, leading to reduced selling pressure on the market.
There is still optimism that Bitcoin might make one last push for the psychological $100,000 price level before 2025 ends.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team