A flurry of Bitcoin whale trades on the crypto exchange Bitstamp is being blamed for BTC’s recent breakdown from $8,056 to $7,475.
Nearly 400 BTC were traded within four minutes of Bitcoin’s 7% plunge on Wednesday, reports Trustnodes.
The selling may have triggered a domino effect that pushed the price of BTC lower across all crypto exchanges.
“124 BTC were sold at 12:41 London time, bringing the price down from $7,900 to $7,700.
A small attempt at bouncing back was met with the selloff of 115 bitcoins at 12:42, bringing the price down to $7,600.
Two more selloffs of around 75 BTC each followed at 12:43 and 12:44, so bringing to an end what looks like a very precise operation, bringing the price down by $100 at each minute.”
The derivatives exchange BitMEX bases its index price for BTC on data from Bitstamp and Coinbase.
That gives whales a potential incentive to sell large quantities of Bitcoin on Bitstamp while placing bets that the price will fall on BitMEX.
Back in May, Bitstamp disclosed that it was investigating a huge Bitcoin sell order that likely triggered a similar widespread crypto crash.
Trustnodes speculates that big players on Wall Street could be incentivized to trigger a crypto flash crash.
“This is nothing new for other commodities markets where courts have found banks guilty of rigging the price of gold, silver, and even of fiat money itself.
There, however, the rigging is against old stuffy men holding on to old-fashioned gold or silver, while here it is against coders and a new young generation.”
Analysts have also pointed to Mark Zuckerberg’s testimony before US lawmakers as another possible factor in Bitcoin’s dip below $8,000.
At time of publishing, BTC is down 6.58% at $7,477, according to CoinMarketCap.