Cryptocurrency News

Cheap ETH: Price of Ethereum Drops 20% in Poloniex Flash Crash

The second-largest cryptocurrency by market cap, Ether (ETH), experienced a sudden flash crash on popular exchange Poloniex. Its price plunged by 20% in an instant, allowing those who had placed orders along the way to benefit from the quick recovery.

ETH Flash Crash on Poloniex

Flash crashes take place every now and then in the cryptocurrency markets. Just now, the price of Ether (ETH), the largest altcoin by market capitalization, fell by as much as 20% on Poloniex when trading against BTC.

ETH/BTC on Poloniex

As seen on the chart, the ETH price fell to about 0.0170 BTC from 0.0211, a drop of around 20%. Naturally, the price went up as quickly as it went down, allowing those who had placed orders in between to realize quick and easy gains.

The reasons for the flash crash remain unknown. However, it’s not the first time ETH has seen such an event. As CryptoPotato reported, ETH experienced a more serious flash crash last December, dropping from about $100 to $13 on Coinbase Pro, formerly known as GDAX.

There have always been competing theories as to the reasons for abnormal price behavior of the kind. Some hold that it signals a sudden ICO fund cash-out or even a whale making a mistake in placing his or her sell orders.

What is a Flash Crash and How Can One Profit?

A flash crash is nothing but a sudden significant downward swing in the price of an asset which is usually followed by a quick recovery, as was the case with ETH today.

As we mentioned in our collection of Bitcoin and altcoin trading tips, placing low orders could be very wise for this reason:

A successful strategy regarding this is placing very low buy orders. About a week ago a crazy dump occurred, selling off Augor coin down to 25% of its value! After a short while, the market recovered slightly and anyone who had low buy orders could easily double or triple their investment. Placing buy orders requires special care; don’t wake up when you’re far away from the market to find your buy order is suddenly higher than the current market price.

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Source: cryptopotato.com
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