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The recent Bitcoin (BTC) sell-off has raised concerns about potential market manipulation, particularly with regards to spot selling on Binance. A thorough examination of the data sheds light on these claims and provides valuable insights into the events that transpired during the sell-off.
The sell-off began at 8:09:31 a.m. UTC, when 113 BTC in sell volume was recorded on Binance. Comparing this to Bitfinex and Coinbase, a noticeable spike in spot sells greater than 0.5 BTC was observed on Binance. The second leg down occurred on low volume, as 86.2 BTC worth of sells in just eight seconds caused the price to drop from $29,860 to $29,730.
1/ Taking a close look at the #BTC selloff yesterday as I've seen some claims of manipulation, specifically that it was spot selling on Binance. Here's the data ⬇️
— Riyad Carey (@riyad_carey) April 20, 2023
Charted below is every spot sell >0.5 BTC on Binance compared to Bitfinex/Coinbase pic.twitter.com/LFGTWbWl6H
Notably, Binance's BTC-USDT 1% bid depth experienced a dramatic decrease during the sell-off. It dropped by a third in just one minute as the sell-off commenced and fell from 600 to 240 BTC within two minutes. Upon examining data from other exchanges, it appears that the dip originated on Binance, with someone selling a large spot position into thin order books.
The BTC-TUSD market seems particularly illiquid for the volume it received, which was about three times the BTC-USD volume on Coinbase, despite having roughly half the liquidity. This discrepancy raises suspicions about the nature of the sell-off and whether it was orchestrated or the result of genuine market fluctuations.
Although it is challenging to determine with certainty if the Bitcoin sell-off was manipulated, the data suggests that a significant spot position was sold on Binance into a thinly traded market, leading to a sharp price decline. It is important for traders and investors to be aware of such occurrences and to exercise caution when navigating the often volatile market.
Yuri Molchan
Dan Burgin
Vladislav Sopov