"BTC Flash Crash Caused By Drop In Network Velocity"

[CryptoBry]

BTC slid from above $8,200 at the start of the day, down to $7,769.90, after hovering above the $8,000 range for a few hours. The Wednesday flash crash has worsened the decline, with BTC price pushing down to $7,540 as of 2:35 GMT.

This extends the loss of BTC to 8.70% on a daily basis, a significant downturn as the leading coin rarely made moves at above 5% per day. For BTC, this is one of the most dramatic price moves since September 23, when the launch of the Bakkt exchange coincided with a crash from the $10,000 tier down to $8,000, where prices stabilized for a while.

The most recent flash crash followed a period of slowing transactions and value transfers. The price loss was a result of lowered network velocity, believes Byte Tree CEO, James Bennet.

Read more here...



Many people were shocked and so concerned with the sudden dip of bitcoin because we were then assuming that it would go north, eventually the direction taken by Bitcoin was going south or down. The simple fact is that demand for Bitcoin dropped, clobbered by USDT which accounted more than 35% of all activities against that of Bitcoin which is just 29%.

Now, I am wondering what can be causes of this dampening of demand for Bitcoin? Can this be a big symptom that we can be going back to the $5000 which a level I really fear?

[Wind_FURY]

I cannot see the correlation. "Lower network velocity" is more HODLING, less spending, and both of them are "using".

[pooya87]

~ believes Byte Tree CEO, James Bennet.
bitcoinist.com

just another idiot trying to talk about something he doesn't even understand. and his nonsense is being published as a valid information by a shitty site desperately trying to get some traffic.

Now, I am wondering what can be causes of this dampening of demand for Bitcoin? Can this be a big symptom that we can be going back to the $5000 which a level I really fear?

the "demand" for bitcoin is still the same. only a big sell off took place which pushed the price down, that doesn't mean demand has changed!
and like always it is not possible to predict the price in an unpredictable situation like this where most people are standing on the sidelines watching.

[cryptoaddictchie]

That's the problem when someone trying to do a manipulation. Imagine one wallet user who sell at a very low price will dragged down the entire market. I dont know if his idiot or just simply wants to monetize and give up already the crypto and decided to leave everything. I hope someone can do the vice versa buy who will right? That someone should have deep pocket in order to pull of this one just like the last bitcoin bubble. Anyway nothing can be done. Just hoping for a huge come back soon. Market really hurts.

[exstasie]

I cannot see the correlation. "Lower network velocity" is more HODLING, less spending, and both of them are "using".

Transaction volume does seem correlated with price. That's why fees rise so much during bull runs. However that's a far cry from a causal relationship where declining volume causes lower prices.

And yeah, declining velocity suggests increasing unwillingness to sell. I don't think James Bennet knows what he's talking about.

[BitHodler]

Yet another lame excuse to the price going down.... this, as always, is a technical drop and not related to anything else. Last year the signs of a bear market were very obvious, so they have been in the last couple of weeks.

Good thing is that because we didn't go up like 1000-2000% what we usually tend to do, the bleeding will be less and the recovery should happen not very far from where we currently are, unless the demand is gone completely.

[darkangel11]

Yet another lame excuse to the price going down.... this, as always, is a technical drop and not related to anything else. Last year the signs of a bear market were very obvious, so they have been in the last couple of weeks.

Good thing is that because we didn't go up like 1000-2000% what we usually tend to do, the bleeding will be less and the recovery should happen not very far from where we currently are, unless the demand is gone completely.

Usually most drops are a result of the news. Yesterday there was a Libra hearing and maybe it had a negative effect on Bitcoin.
One thing is certain it was not a natural move. There are analysis available online and this drop started at 1 exchange - bitstamp. Somebody went there and dumped a lot of bitcoins crashing the price and the other exchanges followed. As you can see you don't have to choose the biggest exchange to influence the market. You can choose one with much less volume and less buy orders and crash it there and the rest will panic and sell into your pocket.

[Wexnident]

Wasn't the cause because of someone selling a large volume of BTC in a short span of time? I believe that such technical effects wouldn't affect the price of bitcoin that much, much less causing it to crash by quite an amount right now. Luckily, It didn't go below 7000$ and should restore itself to the right average a few days later... Hopefully, that is.

[Lucius]

CryptoBry, so you will post new possible reason on every board? I could only say that "drop in network velocity" sounds silly, same as "Mark Zuckerberg grilled by Congress in Washington" or "Did Google Quantum computer results spooked investors?" you posted in Press board.

There are reasons and topics worth writing about, but also nonsense that you should not pollute the forum. This type of news technically belongs to Press, not in Economy/Speculation.

[alyssa85]

That's the problem when someone trying to do a manipulation. Imagine one wallet user who sell at a very low price will dragged down the entire market. I dont know if his idiot or just simply wants to monetize and give up already the crypto and decided to leave everything. I hope someone can do the vice versa buy who will right? That someone should have deep pocket in order to pull of this one just like the last bitcoin bubble. Anyway nothing can be done. Just hoping for a huge come back soon. Market really hurts.

They might not have wanted to tank the market. Perhaps when they made their sell order, there were buy orders on the books, that suddenly got pulled which meant that the sells then crashed through the remaining buy orders...

The lack of decent market makers in bitcoin world is a serious problem. 

[Wind_FURY]

I cannot see the correlation. "Lower network velocity" is more HODLING, less spending, and both of them are "using".

Transaction volume does seem correlated with price. That's why fees rise so much during bull runs. However that's a far cry from a causal relationship where declining volume causes lower prices.

And yeah, declining velocity suggests increasing unwillingness to sell. I don't think James Bennet knows what he's talking about.

But the last "flash crashes" weren't because of "a drop in network velocity", were they. The market is simply manipulated by the whale-cumulators. That's a fact, and we plebs believe whatever the news-writers/bloggers were paid to say.

[uray]

Now, I am wondering what can be causes of this dampening of demand for Bitcoin? Can this be a big symptom that we can be going back to the $5000 which a level I really fear?

If James Bennet says some terminology that does not mean that what he is telling is true, as FURY mentioned if that was true the price would have stayed intact, the main reason i think is that the month end is coming and there will be huge positions being take in the future market by some institutions and once the contract closes the market will be back to normal.

[YuginKadoya]

I really think there isn't need to worry about this is sudden volatility and I am thinking we are sitting in this price right now for a couple of days now and the price is not going anywhere, I really think because of this crash or you can call it correction  is a readying process for Bitcoin to really make a revamp on the movement going back up again, pretty much the price may suddenly spring back up to $9900 or $10,000 USD again, But I guess just don't get involved in a traffic if the price is like this.

[tomahawk9]

~ believes Byte Tree CEO, James Bennet.
bitcoinist.com

just another idiot trying to talk about something he doesn't even understand. and his nonsense is being published as a valid information by a shitty site desperately trying to get some traffic.

To be fair, Byte Tree published an article last week where they explained why the BTC price could continue its downward movement, just google "Bitcoin Velocity Urges Caution" if you want to read it.

the bleeding will be less and the recovery should happen not very far from where we currently are, unless the demand is gone completely.

That's what people said when we went down from 10k to 8k last month. Look at us now, 7500 :/  Word of advice: lower your expectations, let the bitcoin prophets predict whats coming next, simply stay on the sidelines and hodl your coins.

[InvoKing]

The most recent flash crash followed a period of slowing transactions and value transfers. The price loss was a result of lowered network velocity, believes Byte Tree CEO, James Bennet.[/b][/size]

Bullshit. Every drop in the bitcoin price should be explained by a random event or something else.
For the clever investors it sounds like a good opportunity to buy!

[redsun114]

There is nothing that many of us would not associate the crash with and I think that we are just looking for answers that we will really never get because if you traced through all the history of bitcoin increase and crash, there has never been one certain reason to explain such move, we just speculating and speculating without really having anything to show for it.

Why not just we leave the market to act the way it wants first since most of our investment anyway is meant to be for a long term investment. The thing that I can say is that bitcoin is still in a correction phase form that uptrend move of April and the time it hit $13k, so we may still see some dip, but that should not be a panic for us, we should just know that the price will still go back up before the halving next year.

[Wind_FURY]

Did "network velocity" increase all of a sudden? What caused the "flash buying surge" in the market today? Haha. I hope everyone bought the dip.

[figmentofmyass]

Did "network velocity" increase all of a sudden? What caused the "flash buying surge" in the market today? Haha.

nope, and it wasn't bakkt's slight increase in volume or the chinese president's blathering about "blockchain" either. just good old supply and demand at play.

the dip got bought. it looks like it's gonna be bear hunting season for the next few months.

[Yaunfitda]

Does it have correlation? I don't think so.

I agree with @ figmentofmyass, it's just the normal flow I guess, "bitcoin goes down", then "bitcoin goes up", probably there is more demand now that's why investors and or traders started to purchase and then FOMO sets in.

There's no correlation between "Network Velocity" that really push the market today. It's either you bought at dip around $7400 or not and happy to see the gain today.

[InvoKing]

The most recent flash crash followed a period of slowing transactions and value transfers. The price loss was a result of lowered network velocity, believes Byte Tree CEO, James Bennet.[/b][/size]

Bullshit. Every drop in the bitcoin price should be explained by a random event or something else.
For the clever investors it sounds like a good opportunity to buy!

From what i see is something like that, i mean not talk about correction or maybe price that dumped in short time and then bounce back. But it is right when bitcoin price dumped a lot, there must be something happen or maybe bad news come about bitcoin. Agree with you.

+$9k for now which is totally normal after that short drop of the price. Those who sold their coins at $7k are crying right now tho