The digital asset market is presently experiencing lows, with all the top coins taking the lead in moving the ways of the bears. While most people are still claiming that things would become better in the coming days, others have moved swiftly to take their profits or loss as the case may be.
If this has taught the entire crypto market something, even though the bulls might reside in the market for a long while, the bears are always waiting to pounce on it any chance they get. While other digital assets were recording steady declines since yesterday, Ethereum saw a hell of a famous crypto exchange movement, Kraken.
About $131.5 million was liquidated in the process
Kraken is one of the top crypto exchanges across the United States, with loads of users worldwide. The company recently announced that it had been awarded a bank charter. The bank charter allows the crypto exchange to work as a bank, and the banking board of Wyoming awarded it that right. Even though most traders were agitated at their losses on Ethereum, the crypto exchange was involved in half of that, judging by what took place on the exchange in the early hours of today.
Analysts mentioned that the digital asset saw a flash crash that saw the asset register’s price register a 63% decline to register a trading price of $700 at that moment. Around the period, a total of 75,000 Ethereum worth $131.5 million Ethereum was liquidated.
As the usual practice with crashes like this, the second digital asset’s price has since regained momentum and trading close to its regular price of $1700. Even though Ethereum has also seen a massive loss since the start of the market day, the digital asset has been able to leave the group of the worst-performing asset since its price stabilized.
A previous occurrence saw Ethereum lose 60% of its price
Looking at the name of the event, a flash crash is said to have happened if the price of a digital asset sees a massive crash or surge. In this event, the price that the asset sells at the moment is not the correct price and can trigger a sell-off or a happy feeling. Also, many derivatives space players are always affected significantly if they bet on a position, and the asset is moving in another direction.
For example, if a derivative trader bets on Ethereum reaching $500 from its normal position of $1700, this recent $700 price would have made the trader think that his prediction is coming to pass, and meanwhile, it is a flash crash. This is not the first time this would be happening recently, as a recent occurrence involving Poloniex saw the price of Ethereum drop by 20%, triggering a sell-off.
Not only Ethereum has Bitcoin also saw a flash crash of its price after it saw a $600 loss in May 2020. With the price of Ethereum stabilized, we don’t know if the digital asset would trade green or continue to trade in reds in the coming days.