08-02-2020 icon

Bitcoin Stays Strong Despite Weekend Flash Crash

By calvin

The weekend was lit with intense activity for Bitcoin as it experienced a flash crash amidst weekend volatility. Despite the flash crash, which wiped away $1 billion from the futures markets, the cryptocurrency’s price remains high.

Bitcoin Strong in the Face of Flash Crash

Bitcoin price suddenly fell by $1.4 k within minutes to $10,600. Fortunately, it was able to rebound. At the time of writing, the price of the apex cryptocurrency stands at $11,264.77.

The reasons for the flash crash that occurred may include the volume of trades during the weekends and the market for buyers.

Cryptocurrency market snapshot, Aug. 2. Source: Coin360

Cryptocurrency markets usually experience large liquidations during the weekend due to the fact that there are fewer active traders in the markets. As volumes of trading reduce, the likelihood of higher volatility in the markets increases.

The Long-Term Outlook

Some suggest that the flash crash will not have long-term effects and that those most affected by it are leveraged traders who open positions that are larger than the capital they own.

According to a trader,

“We knew this flash crash was coming. 9 flash on the TD sequential. Plus everyone longing the market. It needed to happen at some point. Buy the dip and ride back up.”

Spartan Black, a former partner at Goldman Sachs and current partner at a hedge fund, believes that we are now entering the second half of a 3-year bull market that started in 2019.

He says,

There is new capital flowing into crypto probably enticed by the massive rally in DeFi tokens over the last few months.As new capital comes in, they go into the safer and more liquid large caps like $BTC, $ETH and $XRP first. When was the last time $XRP was up 20% in a day?

New money is flowing into the Bitcoin markets as traditional financial institutions look to spread their influence in the financial technology space. In Italy, an Italian bank, Banca Sella announced the launch of an online Bitcoin service. It joins a growing list of giant organizations that could boost the mainstream profile of Bitcoin.