Bitcoin jumps to $56K on Bitfinex in a flash rally. Can someone confirm or explain this phenomenon and what happens in these cases if sell orders get executed.

I found this a bit shocking, hadn't heard about this in a long time – used to hear an example here and there several years ago. I am curious if sell orders with “dream-price” were actually executed and whether the exchange honors those orders. If it does, then it's a pretty sweet deal for those sell orders – making an instant 100% above market, or, can double the holding instantly.

Can anyone confirm this and explain how that happens? Because the downside is also possible but good news is that nobody sets a sell order on down price, someone have to be out of mind to set a sell order when price declines let's say 50%.

Interesting times. The article states lack of liquidity as a major reason for the flash rally and liquidity is becoming scarce across exchanges. Do you guys expect this to happen more often? Should I set my sell orders? 🙂

50 thoughts on “Bitcoin jumps to $56K on Bitfinex in a flash rally. Can someone confirm or explain this phenomenon and what happens in these cases if sell orders get executed.”

  1. Knowing how CEXs are, I can not imagine them honouring those sell orders and if you were lucky enough to sell during that time they’d be freezing your account and reversing the transaction before you can cash out.

    Downvoted….really? You that fucking naive?

  2. 56k is dream price? Damn. I guess I’m dreaming. I’ve made a few buys above that lol

  3. Probably a momentarily backend glitch which I wouldn’t look too much into unless it repeats itself

  4. Liquidity spike or bug!

    I remember when there was a flash crash on Binance during last bull run. Some people made instant a lot of money!

  5. This is why it’s a good idea to have buy/sell limit orders set. Could get yourself a very good deal

  6. It wasn’t a glitch, it was because of the low liquidity on Bitfinex.

    Exxchnages of the sort are prone to manipulation when the liquidity is so low.

  7. Probably isn’t a single short on bitfinex that didn’t get absolutely skadooshed.

  8. Cointest pros & cons with related info are in the collapsed comments below for the following topics: Bitcoin, Tether.

  9. So that guy who bet BTC would reach a million bux could just have done this little trick and ta-da, he would have won his bet.

    Let me go track him down and pass on this eye opening news.

  10. Do a quick check on what an order book is.

    Do a quick check on whatever shit cex you’re talking about’s depth chart.

    Ask yourself what happens when someone does a market order buy for 50k but there are only sell orders with 50k in depth to 56k.

    Then check what an arbitrage bot is.

    TLDR a big buy happened on one cex and it filled sell orders all the way up to 56k before arbitrage bots swooped in and returned the cex’s order book to market rate.

  11. These aren’t that uncommon on crypto exchanges. Binance, in particular, is the worst about it. We call them scam wicks.

  12. Oh boy did I get lucky. I have an open position on the short side with BTC ~30k, liquidation at about 35k, but it’s in perpetual contracts so the price volatility didn’t screw me.

  13. Isn’t Bitfinex one of the exchanges that trades against their own customers? They were probably just popping shorts for ez money.

  14. The answer is simple…it’s an unregulated market. Do you have billions to throw around and manipulate an unregulated market to entice the average fool?

  15. It was bitcoin derivatives futures contract , but holy hell , that’s wack

  16. Lol it’s Paolos wash trading bots at work. It’s in our best interest that Tether keeps printing magic internet money to drive crypto prices up

  17. yeah you can take advantage of these rare moves but i wouldn’t risk it. while it would be nice to make a massive gain from a liquidity shortage the risk is if tether ever depegs you could have those orders filled worthless in tether

  18. You’d have to leave your money in the exchange wallet, right? That sounds risky. Or is there a way to have a long term sell order in a hot wallet maybe? Still would make me nervous.

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