Bitcoin on March 12th: A crash-course in volatility
Was it easy to benefit off glitches in the crypto matrix?
As you might of noticed, today was one of the most volatile days in the history of Bitcoin trading. Not to mention the general chaos with so many people experiencing fears and uncertainty about the future, which is a bit more important. Still as Brian Bemaish likes to say “traders gotta trade”.
Opportunities?
In the cryptocurrency markets things easily get out of hand. But was it that easy to make money off today’s glitches in the markets matrix?
24 hours ago Bitcoin was traded at above $8,000. When we arrived at the office this morning it was around $7,500. It dropped to a low of $5,683 (XBX) by the time of writing (Edit: later dropping to below $3800), and most of this distance was traveled within one hour!
So lets go over some interesting opportunities and events that happened during today’s crash.
Bitcoin’s spot trades above June contract
It was a big day for basis traders. In the Bitcoin futures markets the June contract was traded for almost an hour for a price of up to $650 lower than the spot and perpetual contract price, due to heavy liquidations in the June BTC/USD contract.
Watching live the heavy liquidations and the gap between the contracts was exciting (while feeling sorry for whoever was getting liquidated) and this was a great opportunity for whoever managed to buy the June contract, as in normal condition the later contracts trades above the perpetual contract. Whoever bought the June contract during this time, could make hundreds of dollar “for free” on every Bitcoin they invested. The catch was that many of the exchanges were going into overload and some APIs crashed as well, so not everyone who saw this could jump on the opportunity. High volatility is as always a great stress test for the exchanges, who differently from traditional markets, do not halt trading if there’s extra high volatility.
ChainLink flash crash
Another hard-core moment of crypto volatility today, and a great opportunity to brag for whoever bought $LINK at a low price, after it reached momentarily $0.013 USDT at 10:48 UTC.
We assume a withdraw of the market-maker during the volatile times, combined with some panic and the effect of the 5X leverage in this pair, came together to create this extreme flash crash, which should go down in the crypto flash crash history books.
We’re glad to get some rest after a long and interesting day. Lets see what the rest of the day and the coming weekend will bring. Trade safely and we hope you stay healthy as well.
This information was published through the courtesy of Efficient Frontier
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