Jon Geenty, a data scientist from the Coinmetrics on-chain analytical team, posted a chart of BTC/USD trades initiated on major exchanges at the same time the Bitcoin (BTC) price plunged.
Coinbase, leader of a painful sell-off
Typically, rapid price drops correlate with liquidations on Bitcoin (BTC) derivatives trading platforms. However, Mr. Geenty has highlighted that there is a different story at play here.
According to data from his team, the most devastating sell-off took place on spot trading markets on the Coinbase exchange. Other platforms also participated but their shares were insignificant.
It is interesting that the brightest ‘buy the dip’ attempts were demonstrated by Kraken and Bitstamp traders.
It was mentioned in the comments of the analysis that the sell-off coincided with the daily and weekly close.
Second successive sell-off detected
Five days ago, the Coinmetrics team released the holistic report, ‘Market Insights: Spotting and Exploiting Market Volatility’, which attempts to track the trading processes associated with the Bitcoin (BTC) price collapse that occurred on May 9, 2020.
On that day, crypto markets tanked 16% in a few hours while the first 10% drop took 10 minutes. Some traders admitted they felt ‘Black Thursday Vibes’.
On May 10, Coin Metrics’ internal systems fired off an alert that an abnormally large deposit took place on @Gemini. An hour later, markets fell almost 16%— CoinMetrics.io (@coinmetrics) May 21, 2020
Below we investigate the insights that holistic data strategy could provide during such an eventhttps://t.co/CYhZpIYJrU pic.twitter.com/sMpc9QW5Eo
Coinmetrics revealed that the drop was also caused by a trade on a single exchange, Gemini. A whale from the Winklewosses’ platform sold an abnormally large amount of Bitcoin - 2,500 BTC.
Similar to today, Bitstamp and Kraken traders were the most active in the short ‘buy the dip’ phase.