Exchanges Freeze as Cryptocurrencies Flash-Crash
Bitcoin dipped to around $8,700 before recovering above $10,000, but mood still bearish for all crypto assets as technical problems mix with panic mode.
Bitcoin has often been called "the honey badger of money" for its resilience- but the market price is extremely fragile. As the climb of BTC went parabolic with a few thousand-dollar days, soon it all came crashing down to a low under $9,000.
Granted, BTC has had previous climbs and drops like this, but with extremely high, psychologically loaded price levels achieved, the correction- or crash- was even more worrisome.
The peak price caused BTC owners to try to move their coins to an exchange, causing another large transaction backlog. Exchanges like Gemini, and for a while Coinbase, were down, further underlining the fragility of the system.
#Bitcoin transaction backlog (mempool) for the past day. Backlog TRIPLES starting at 04:00 (filtering out spam).— Bruce Kleinman (@Pressed250) November 29, 2017
Methinks the "traffic jam" is people trying to move BTC from their own wallets to their exchange to sell. Many are STILL waiting, my "narrow pipe" thesis writ large. pic.twitter.com/gjVvfGatRP
For about three hours, the Gemini trading platform was in crisis mode, trying to deal with the influx of transactions and orders. Users shared stories of orders not getting filled, especially buying at the lower price.
"This incident has been resolved. Gemini is now operational," announced the platform.
The five-hour event, called "the crashening", affected altcoins as well, with some accidental drops to very low prices, as low as $10 for Ethereum at one point and $3 for NEO. But those were anomalies or perhaps a technical mistake made in panic mode, traders noted. A Telegram group was formed to discuss the strange behavior of the Bitfinex page that did not allow the normal closing and placing of orders, and led to negative account balances:
"The page of bitfinex played against the users, in addition to the suspicious fall in the prices of the above-mentioned pairs, due to technical problems of their exchange," wrote one poster in a dedicated Telegram group for those affected.
As Bitcoin prices continue to drop, and there are more than 63,000 transactions pending, the selling may continue in the next few days, with prices of $8,000 predicted for Bitcoin, but buyers still ready to buy in case of a deeper correction.
At the moment, Bitfinex trades BTC at $10,145, while the Korean markets still hold above $11,000, a curious disparity. Bitcoin Cash also trades above $1,400 in Korea, but down toward $1,300 on the rest of the markets.