Why does such a sudden price spike happen?

[Synchronice]

As you guys know, there was a Matic token swap to Polygon on Binance and other exchanges. Yesterday, Polygon got listed again on Binance but there was a sudden, unusual behavior. Matic's price was nearly 0.39 USD and someone paid up to 1 USD per token and then the price went down to normal price again.
This isn't something new of course, I have seen it many times but I don't really understand why such spikes happen. Why would someone pay $1 on Matic when he or she could buy tons of it for only $0.39?

Click on image to zoom

[Dr.Bitcoin_Strange]

Why would someone pay $1 on Matic when he or she could buy tons of it for only $0.39?

This is not actually the first time that this kind of trades is taking place, it usually happen especially on binance exchange as I have observed it a few times. As of last year, there was also a spike in the price of Bitcoin where some sold for a very high price (more than 30%) of the current price, I believe it's the buyer that makes such mistake by setting a buy order at a high price and if there's also a seller's order that match that of the buyer, it's going to execute. Just uncommon mistakes that few people make at time.

[Wapfika]

This isn't something new of course, I have seen it many times but I don't really understand why such spikes happen. Why would someone pay $1 on Matic when he or she could buy tons of it for only $0.39?

Short answer due to the thin liquidity on the orderbook.

This kind of price fluctuations occur if a huge market order was initiate while the orderbook doesn't have enough liquidity to absorb it. This cause a temporary price fluctuations that later on correct since the market maker will fill again order on the orderbook to correct the price.

This is common on tokens that has a surge volume of buyers that want to guy first or some deep pocket trader use market order in panic while they use a huge capital.

[Charles-Tim]

Matic's price was nearly 0.39 USD and someone paid up to 1 USD per token and then the price went down to normal price again.
This isn't something new of course, I have seen it many times but I don't really understand why such spikes happen. Why would someone pay $1 on Matic when he or she could buy tons of it for only $0.39?

Your chart is 15 minutes chart. I want to use 1 second chart but it was difficult for me to scroll back to the beginning of the chart. So I use 1 minute chart. If you use 1 second chart, you will still notice something similar that it would be done in a way that no one will neither gain nor lose.



That price increase will occur at the start of trading and it is fake than what the exchanges let you see. Nobody will be able to buy and sell at that high price.

[SquirrelJulietGarden]

This isn't something new of course, I have seen it many times but I don't really understand why such spikes happen. Why would someone pay $1 on Matic when he or she could buy tons of it for only $0.39?

This is not new and I only surprised that why you waited a long time to ask this question.

My answer can be wrong, but correct me if anyone feels it is wrong. This dumping candle can be explained like at the start of trading, of this trading pair, the company team sets up that sell order, and self-fills it by their small buy order. The order size can be small like a minimal amount on Binance, I remember it is $10. Then they let it has a free fall to lower price range, it is easy.

I don't know about Binance, but on other exchanges (smaller than Binance), when you want to list your coin on their exchanges, you will need to have fund requires for liquidity: the token and a stable coin, if the trading pair for listing is token / stable coin. You know with this available token and stable coin, the project team can do such fake candle easily.

[Hamza2424]

As you guys know, there was a Matic token swap to Polygon on Binance and other exchanges. Yesterday, Polygon got listed again on Binance but there was a sudden, unusual behavior. Matic's price was nearly 0.39 USD and someone paid up to 1 USD per token and then the price went down to normal price again.
This isn't something new of course, I have seen it many times but I don't really understand why such spikes happen. Why would someone pay $1 on Matic when he or she could buy tons of it for only $0.39?

Hmm, this is not one of the rare events it's quite usual, whenever a coin gets listed a battle between the buyers and sellers gets started due to high volume and liquidity, sot hat the reason such huge spikes appear, in more than 90% of coins you can see such spikes and even in more.

If it is only concerned with spikes, not with the initial ones there can be several reasons, Platform Manipulation, Whale activity, short-term squeezing, and Events boost. But all of this happens with the change in volume and liquidity of any particular coin.

[BABY SHOES]

Now this was my question before... Yeah have seen this a few times on other altcoins is this some kind of bug or manipulation?

I'm not familiar with how the market works like this so it's a bit ambiguous for me, maybe someone can enlighten me in detail so I know the reason behind it.

Sometimes btc is sold at a very low price from the normal market price? Is that someone doing that?

[ShowOff]

Sometimes btc is sold at a very low price from the normal market price? Is that someone doing that?

Of course there is, someone coming in with hundreds of bitcoin can do that on one exchange especially if the orderbook is low. This has happened to centralized exchanges before, but I forget what the name of the exchange was.

For initial listing prices, long candles are always present. It only ranged for a few miliseconds, who knows what exactly happened but I think it was just a momentary spike in the hot zone. You can notice when binance will open trading on a new asset coming to their exchange, look at the first candle because I'm sure the long green candle will be there.

[Zaguru12]

Now this was my question before... Yeah have seen this a few times on other altcoins is this some kind of bug or manipulation?

I'm not familiar with how the market works like this so it's a bit ambiguous for me, maybe someone can enlighten me in detail so I know the reason behind it.

Sometimes btc is sold at a very low price from the normal market price? Is that someone doing that?

Most at times people usually attribute it to sales by bots but the sharp drop of this is not even caught by the boys as we put them to be. The valid reason I think is when the tokens are given to exchanges with their own given tokens as liquidity included the exchange list it at that ATH and to avoid the sale at this price by many investors they quickly withdraw or sell off their own. This is similar to when shitcoins that are built on the decentralized exchanges are rugged.

The price fall off sharply when a large amount of the token is taking off and with the speed at which this happens it is only the developers or the exchange that can pull this off. So I think it is the withdrawal of some liquidity to Fend off any mass sell that will totally crash the token to zero that is the reason

[BitMaxz]

How exactly did you know that some guy bought it for $1?
Honestly, this is normal for newly listed coins someone could set a limit sell order at $1 like others said above market makers are the ones who set it at $1 and since it's not only one guy other market makers will fill the gap as a sample I put a limit sell order at $1(Not the average price of matic from all exchanges) and you put a limit sell order at $0.5 in just a few seconds until someone again fills the gap of $0.39 then that's a spike.
So it's normal for a newly listed coin and if someone bought it at $1 price then the one who made already made a profit but filling these gaps is pretty fast since there are many traders on Binance.

[SmartGold01]

As you guys know, there was a Matic token swap to Polygon on Binance and other exchanges. Yesterday, Polygon got listed again on Binance but there was a sudden, unusual behavior. Matic's price was nearly 0.39 USD and someone paid up to 1 USD per token and then the price went down to normal price again.
This isn't something new of course, I have seen it many times but I don't really understand why such spikes happen. Why would someone pay $1 on Matic when he or she could buy tons of it for only $0.39?

Click on image to zoom

I think this is usually from the project owner to attract more attention to people while it got listed, what you should know is that this is something very common to exchange especially with centralized exchange. I could also remembered then when a coin I was holding spike to something else and it was a dream to me and I kept asking why didn't I placed a sell order when they opened deposit as then include had made some x before the price drop to the original price or a more stabilized price.

[JeffBrad12]

some people chasing market price at the first second of listing where there's not even that much supply to begin with, as a result their buy order hits the ceiling price, it's very normal occurrence in a new market where there's still no equilibrium, you would expect that some people are just that hasty in making decision.

you'd see same thing in every newly open pair, heck even in twitter there were times when the exchange's side exposed selling coin at really high price taking advantage of this loophole.
the crypto market at the first minutes of opening is always wild west, it's pure price swing that could go from up 500% all the way to minus 500%.

[Rampagoe004]

As you guys know, there was a Matic token swap to Polygon on Binance and other exchanges. Yesterday, Polygon got listed again on Binance but there was a sudden, unusual behavior. Matic's price was nearly 0.39 USD and someone paid up to 1 USD per token and then the price went down to normal price again.
This isn't something new of course, I have seen it many times but I don't really understand why such spikes happen. Why would someone pay $1 on Matic when he or she could buy tons of it for only $0.39?

Every freebie like this often happens in the market, not only on Binance. If you look at the crypto market, this is nothing new. The analytical graph which has the potential to rise suddenly without realizing it in the near future will decline drastically because the crypto algorithm is not in line with the predictions according to the analysis. It's not a rare thing that candles change all the time, especially when new coins appear on the sales exchange. Most beginners when they see something like this panic and rush to take action, I think this is something that normally happens on large exchanges like Binance.

[maydna]

No need to surprise to see that spike price because that will happen many times especially when altcoin season coming. Those people who buy at $1 are people who afraid they miss something so they still enter to market and buy that coin in any price. Perhaps some people use buy instant that coin because they think the price will still increase.

But unfortunately, the price is down and back to the price before and makes those people who buy at the high price is lost their money. That will happens to other coins when they see spike price and will think that they can make a big profit.

[Awaklara]

Why would someone pay $1 on Matic when he or she could buy tons of it for only $0.39?

I'm not sure if this is a strategy or a trader's mistake. What is certain is that the price returned to the initial price because the order at $ 1 has been filled and there are no more orders at the same price, which makes people who sell directly at the market price can be fooled.
you may often see this kind of thing in new token trading, which is more common in memecoins. surely something like that is intentional by certain parties to get attention. from their token holders.

[irhact]

This isn't something new of course, I have seen it many times but I don't really understand why such spikes happen. Why would someone pay $1 on Matic when he or she could buy tons of it for only $0.39?

Click on image to zoom

Market manipulated that's all I can think about as their are some whales that just like manipulating the market for their own gains. It could be the whale has bought alot at that price $0.39 and then he was trying to manipulate the price to $1 so he can sell off all his bag and make lots of profits. It could also be an innocent trader that didn't know that the market is being manipulated and he bought at that price hoping that the market was about to start pumping. This is why I don't buy tokens that are listed newly because they're always very volatile and alot of manipulation takes place. It's the lost to those that bought at $1 as the token might never go back to that price and they have to keep holding.

[o48o]

This isn't something new of course, I have seen it many times but I don't really understand why such spikes happen. Why would someone pay $1 on Matic when he or she could buy tons of it for only $0.39?

Short answer due to the thin liquidity on the orderbook.

This kind of price fluctuations occur if a huge market order was initiate while the orderbook doesn't have enough liquidity to absorb it. This cause a temporary price fluctuations that later on correct since the market maker will fill again order on the orderbook to correct the price.

This is common on tokens that has a surge volume of buyers that want to guy first or some deep pocket trader use market order in panic while they use a huge capital.

It doesn't even need huge market order, but just a faulty market maker bot messing up the liquidity momentarily. These days spikes like these are rare compared to crap we had to deal with back in time in crypto. Spikes and spreads were insane and anyone with enough money could absolutely destroy charts. Back in day in cexes you could set up buy orders to ridiculously high and low to catch these. Binance was the first one i saw that had limits on how high and low you can set them.

Dexes didn't even have cumulative buy and sell walls but you had to deal with specific buy and sell orders, making people buy and sell all over the map by mistake and messing up the chart.

[passwordnow]

Yeah, that's not new and it makes sense that someone would like to purchase above market price but what is unusual is that when someone sells below the market price and this has also happened for so many times. With such errors, it's about putting the number sell price unknowingly. But on OPs question, it's already been answered that there could be a lot of factors, aside from liquidity, it could be some folks trying to create some volume in there to make day traders awake at that very moment.

[Sabuj_pal]

As you guys know, there was a Matic token swap to Polygon on Binance and other exchanges. Yesterday, Polygon got listed again on Binance but there was a sudden, unusual behavior. Matic's price was nearly 0.39 USD and someone paid up to 1 USD per token and then the price went down to normal price again.
This isn't something new of course, I have seen it many times but I don't really understand why such spikes happen. Why would someone pay $1 on Matic when he or she could buy tons of it for only $0.39?

Click on image to zoom
https://talkimg.com/images/2024/09/14/BBBa2.jpeg

It is basically happens when Binance list any crypto currency, I assume that it is just for their test to make everything is working fine or not. no one is able to buy or sell at this price. 

[Peanutswar]

Ive seen this always happen when an exchange-listed a new coin and people hold a lot of it and they see an opportunity to make a quick flip of their asset, if its not into a reliable exchange there's a market manipulation such as other might get a honey pot and they cant make a pull out their investment anymore. Also if the demands are not going through this is the reason why its ideal if the projects have a good management so people will hold their coins like happens in the TON network before and now see the price of their coin after the dump of people who makes it farm. The value of the coin may varies on the project, and purpose of the coin but afterwards you will see those like a week or a month.