ADVERTISEMENT

Why did the BTCUSD crash? Was it the BTC whales or the exchanges that orchestrated it
W

The BTC whales and the BTC exchanges need not be different entities. A crash or an unexpected move stands to benefit the whales and harm the retail traders.

The latest crash in BTCUSD brings to light the influence of the market manipulators. A tiny push from the whales and the FOMO effect takes over.

Greed and herd-mentality complete the loop. Investors jump into the fake bull trap and end up losing a lot of money. Whales make money even if the market crashes.

 

Delving deeper into the BTCUSD crash

The crash that happened yesterday was a two-pronged approach. It began a day earlier when BTC rose abruptly. 

  1. The first stage of the crash began when the traded volume spiked on June 1. In an illiquid market, it doesn’t take a lot of buying to manipulate prices. Once people thought BTCUSD would go up, they started buying. It was the FOMO phase. That is all the whales had to do!
  2. Now, as the price went higher, the whales could sell and gain from the spread. The fact that in six minutes, BTCUSD crashed, proves a very few participants did the massive dumping. The crash took just about six minutes!

Here is the BTCUSD daily chart.

 

How does a BTC crash benefit the whales?

A crash could benefit participants who hold shot position. Shorting BTC means they are betting for a decline. And when BTC declines, they benefit from their shorts.

BTC whales and BTC exchanges need not necessarily be different entities. Exchanges encourage traders to opt for leveraged positions. And when something totally unexpected happens, the trader with the leveraged trade loses the most. It occurs if the trader took the view that was opposite to the direction of the crash. 

 

How to be safe from such crashes?

Exchanges know the sentiment of the market, as they are aware of the trades taking place. And therefore, it is not a big deal for them to manipulate the market.

The best way is to stop taking directional bets in BTCUSD. Hedging, if possible, should be adopted. Long term investing in an appreciating asset is always a better decision than day trading.

+ posts

Sabyasaachi is a stock market enthusiast by day, a content writer by night. He believes that 90% of one's problems can be solved by marketing, while solving the other 10% just requires good procrastination skills.

Disclaimer: The views, thoughts, and opinions expressed in the article have been curated for our audience and does not warrant a 100% accuracy. All the information mentioned in the article is subject to change according to the changing viewpoints. Feel free to reach us at [email protected] for any change or copyright issues.

Note: If you buy something via a link on this page, we might earn a small commission on it.

Sabyasaachi Karmakar
Sabyasaachi Karmakar
Sabyasaachi is a stock market enthusiast by day, a content writer by night. He believes that 90% of one's problems can be solved by marketing, while solving the other 10% just requires good procrastination skills.

Leave A Reply

Please enter your comment!
Please enter your name here

related stories

From post-workout beer to cars as a new personal space, these trends offer businesses a wide range of capitalization opportunities to explore.

Emerging Trends: Performance Beer, Digital Decor, and Cars, a New Personal Space

0
Post-workout Beer As per Keywords Everywhere, thousands of people are searching for 'drink beer post workout' monthly. It has fermented a new class of post-workout...
With easy internet access and high smartphone penetrations, there has been a shift in rural customers' aspirations opening opportunities for marketers.

Rural Marketing in the Post-COVID Era: A Lucrative Space

0
There has been a gradual evolution in rural marketing for the past few decades. Since most of the Indian population resides in rural areas,...

Challenges in Indian Startup Ecosystem

0
The Land Accelerator South Asia 2021 The Land Accelerator is a four-month curated program focused on training and supporting entrepreneurs working to restore land, forests,...
The idle minds and empty hands are using more devices, apps, and postures in the lockdown. We are here for a 30 billion USD industry booming around that.

Sextech: A Booming Billionaire Dollar Industry

0
Sex has always been a shady space in India. For a culture that takes price in Mind Control, Yoga, and worshiping saints, sex has...
Midea is facing the same fate as many Chinese corporations, asking for funding, going the old-fashioned way, through Kickstarter like Indiegogo.

Midea looks forward towards better development through crowdfunding, what could this mean for the...

0
Midea is a multinational technology company specializing in HVAC systems, consumer electronics, robotics, and industrial automation, and the digital market. (1) Midea provides a...
Amazon won the fight against labor organizing at its Bessemer, Alabama, warehouse on Friday, with employees opposing the Retail, Wholesale, and Department Store Union 2-to-1.

Will Amazon continue to live the bad light amongst its workers?

0
The COVID-19 pandemic has wreaked havoc on cultures and economies all over the globe. However, Amazon.com, Inc. has increased, cementing its status as the...
There has also been a boon for retail investors seeking profit and reliable trading platforms. Here are the top Robinhood alternatives in India.

Top Robinhood Alternatives in India

0
India's new trader breed had light-up Dalal Street in 2020. It was the year when many people across the globe were forced to stay...

Trending: Crypto College Loans, Viridian Vibes, and Bananatex Going Bananas

0
Students Going Crypto A group of students and advisers from several universities collaborated to built Student Coin in 2018 (1). It is a blockchain framework designed to...
ADVERTISEMENT