Bitcoin crash by 90%. Why it happened and how to benefit

Last week, the price of bitcoin on the Binance US crypto exchange fell to $ 8.2 thousand. Sometimes such sudden collapses occur with other cryptocurrencies. What is the reason for this and is it possible …

Last week, the price of bitcoin on the Binance US crypto exchange fell to $ 8.2 thousand. Sometimes such sudden collapses occur with other cryptocurrencies. What is the reason for this and is it possible to prepare for this

On October 21, the bitcoin rate on the Binance US crypto exchange at the moment dropped to $ 8.2 thousand. After that, the quotes returned to their previous values. As of October 24, 15:00 Moscow time, the first cryptocurrency is traded at the level of $ 60.3 thousand, over the past day it has fallen in price by 2%.

The day after the incident, the company explained that the reason for the instantaneous collapse of the cryptocurrency rate by 87% was an error in the trading algorithm of one of the users. An institutional trader found it in his trading terminal.

This is not the first such case. For example, in 2017, the price of Ethereum on the Coinbase Pro trading platform for professional traders dropped from $ 319 to $ 0.1 at the moment after the multimillion-dollar transaction was completed.

However, if we talk specifically about the bitcoin rate, it is also often subject to high fluctuations on some trading floors. For example, in March last year, on the decentralized Binance DEX platform, the BTC rate paired with the USDS stablecoin fell from $ 8.8 thousand to $ 101. The trader who managed to catch this decline received 8700% of the profit in one trade.

Some traders do manage to buy cryptocurrency at the time of these crashes. For example, in the case of the last drop in the price of bitcoin, one of the users managed to buy a cryptocurrency for $ 11.1 thousand, thus earning over $ 50 thousand.The trader explained that he had placed a limit order to buy one bitcoin for $ 11.1 thousand on Binance US two months ago.

How to prepare

According to Sergey Zhdanov, CEO of the EXMO crypto exchange, there are traders who know about the peculiarities of the platforms and place buy orders at a low price. It is impossible to have time to buy a much cheaper cryptocurrency. Trading bots are included on the platforms, which will do it instantly and faster than any trader. Therefore, you can purchase an asset at a reduced price only if you prepare in advance. To do this, you should pay attention to the following factors:

Liquidity. On the one hand, “shooting” is possible only when a large number of coins are sold. Therefore, it is important to target popular cryptocurrencies such as Bitcoin and Ethereum. Most transactions take place with them in the digital asset market.

On the other hand, lumbago is possible only if there are few orders of other traders in the order book. And this, on the contrary, is inherent in little-known cryptocurrencies. Therefore, it would be ideal to find a popular coin on the marketplace with a low number of orders for its purchase or sale.

Pair. Most trading with all cryptocurrencies is done using USDT. At the same time, there are few transactions in pairs to other stablecoins, for example, USDS, TUSD, BUSD, PAX. Therefore, it is more efficient to place orders in anticipation of a lumbago there.

Exchange. It is possible to increase the chances of catching the "lumbago" thanks to the competent selection of the exchange. And there are some subtleties here. It is more efficient to choose a small trading floor, as it is likely to have low trading volumes and order book liquidity.

But using small exchanges can lead to a loss of capital. The main source of income for sites is trading. If their volume is low, then the company is making little profit, and there is a risk of bankruptcy.

Therefore, it is most effective to choose new platforms that have not yet gained popularity, launched by large companies, or decentralized exchanges.

Placing orders. Success depends a lot on where to place the order. Here you also need to find a middle ground between two conflicting points. The lower the price at which you place the order, the higher the potential profit. But it also lessens the chances of the "lumbago" reaching your buy request. The higher the order is placed, the, on the contrary, the higher the probability, but the lower the possible profit. The optimal solution would be to place a buy order not lower than a large cluster of orders from other traders.

The number of orders. "Shooting" is extremely rare. To increase the odds, you can divide the capital into parts and place many orders where an abnormal rise or fall in price is possible. However, in this case, the volume of each individual application will be small, and consequently, the potential will be lower. Therefore, perhaps the best solution would be to place several large orders in pairs with popular cryptocurrencies and unpopular stablecoins.


There are many risks and nuances, the observance of which will not only help to increase the result, but also protect against loss of funds.

First, the placement of orders based on the shooting requires control. If you have placed a request to buy bitcoin at $ 1000 on a small exchange, you can be sure that tomorrow a similar request will appear there at the $ 1000.01 mark. And this can affect any pair with any cryptocurrency. There are users on the market who stubbornly hunt for "lumbago", every day, several times checking and rearranging orders for a cent is more profitable than competitors.

This poses a second problem: you can be wrong. For example, when specifying a price when placing an order, add an extra zero or put a non-comma in that place. Or choose the wrong form and, when placing an order for the purchase of BTC at $ 100, accidentally sell it at this price. Therefore, it is extremely important to carefully double-check the completed fields. If you order the order to be executed, you will no longer be able to cancel it. Either the coins will be sold at an unfavorable rate to another user, or they will be instantly bought by a trading bot.

Third, there are limitations. After the bitcoin rate on the Binance exchange fell to $ 600 in a pair against USDS, it became impossible to place an order at such a low level. The exchange has introduced restrictions, and now you can place an order to buy or sell an asset at a price that differs from the current one by no more than 5 times. Other sites could have taken similar measures.

Fourthly, on some platforms automatic order cancellation is enabled.

Fifthly, the exchange can roll back transactions. Often, the rules for using the trading platform indicate that it reserves the right to cancel part of the operations if it considers that they occurred as a result of a failure, hacker attack or for other reasons. For example, in February, Poloniex canceled and erased 12 minutes of trading from its history. The company blamed an error in order execution as the reason.

Sixth, it is risky to place orders counting on an abnormal fall in pairs for all cryptocurrencies in a row. There is a risk that the price of any coin will fall many times by itself, without lumbago. In this case, you are likely to buy an asset with dubious prospects.

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