Sarah Tran
Independent Analyst
- Following Bitcoin price all-time high earlier this week, Binance US traders witnessed BTC fall by over 80% on the trading platform.
- The American arm of the leading crypto exchange explained that the flash crash was due to an error in the trading algorithm.
- Bitcoin price reached a low of $8,200 before resuming trading at the correct price.
Bitcoin price reached an all-time high of over $67,000 on October 20 and the bellwether cryptocurrency is starting to retest key support levels. While BTC dropped to roughly $62,000 on most exchanges, traders on Binance US witnessed a flash crash of 87%.
Bitcoin price suffers 87% fall due to a bug
Bitcoin price rapidly dropped 87% on the Binance US exchange on October 21, as BTC reached a low of $8,200 from approximately $65,000, while the leading cryptocurrency’s price remained above $60,000 on other exchanges. The bellwether cryptocurrency quickly snapped back to its correct price following the flash crash.
According to Binance US officials, one of its institutional traders indicated to the firm that they had a bug in their trading algorithm, which may have caused the massive sell-off. The leading crypto exchange continues to look into the event and added that the institutional trader has fixed its bug and that the issue has been resolved.
Errors that cause flash crashes occur in the finance industry when traders accidentally make mistakes in the details of their intended trades by entering the incorrect price or order size. Large block trades could overwhelm the exchange’s order book, leading to a massive flash crash.
Bitcoin price to retest crucial foothold before resuming rally
Bitcoin price continues to trend within an ascending parallel channel on the 4-hour chart. While BTC tagged the upper boundary of the governing technical pattern when it reached its all-time high at $67,000, the bellwether cryptocurrency is nearing the downside trend line of the chart pattern.
Bitcoin price may discover immediate support at the 50 four-hour Simple Moving Average (SMA) at $61,647. An additional foothold may emerge at the lower boundary of the parallel channel at $61,072, which coincides with the support line given by the Momentum Reversal Indicator (MRI).
BTC/USDT 4-hour chart
If selling pressure overwhelms the bulls, Bitcoin price may fall further to reach the 78.6% Fibonacci retracement level, which sits near the 100 four-hour SMA at $58,753. Lower levels are not expected unless a massive spike in sell orders materializes.
The 20 four-hour SMA at $63,831 acts as the first level of resistance for Bitcoin price after market participants engaged in profit-taking. Only slicing above this level and $64,691, the middle boundary of the governing technical pattern, would see BTC retest its all-time high.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
Ripple wipes out weekly gains, experts comment on role of Ripple stablecoin
Ripple declined to $0.52 on Thursday, erasing all gains registered earlier this week. Ripple SVP Eric van Miltenburg’s comments on the firm’s stablecoin, and how it is expected to benefit the XRP Ledger and native token XRP have raised concerns among crypto experts.
Hedera HBAR slips nearly 10% after air is cleared on mistaken link with giant BlackRock
HBAR price is down nearly 10% on Thursday, partly erasing gains inspired by the misinterpreted link with BlackRock. Despite the recent correction, Hedera’s price is up 44% in the past seven days.
The reason behind Bonk’s 105% rise and if you should buy now Premium
Bonk price has shot up 105% in the past five weeks. A retracement into $0.0000216 or the $0.0000152 to $0.0000186 imbalance would be a good buying opportunity. Patient investors can expect double-digit gains from BONK that could extend up to 70%.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price. Coupled with broader market gloom, INJ token’s doomed days may not be over yet.
Bitcoin: BTC post-halving rally could be partially priced in Premium
Bitcoin (BTC) price briefly slipped below the $60,000 level for the last three days, attracting buyers in this area as the fourth BTC halving is due in a few hours. Is the halving priced in for Bitcoin? Or will the pioneer crypto note more gains in the coming days?