Bitcoin Investors Unshaken by Sunday’s Flash Crash, Data Suggests

Bitcoin investors look to have shrugged off Sunday’s sudden $1,400 price crash.

AccessTimeIconAug 3, 2020 at 11:57 a.m. UTC
Updated Sep 14, 2021 at 9:39 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Bitcoin investors appear to have shrugged off Sunday’s violent price crash, according to one data metric. 

  • In just minutes, prices fell by around $1,400 from over $12,000 to sub-$10,700 levels Sunday.
  • The rapid fall crowded out over $1 billion in bullish leverage from the futures market.
  • Yet, as the cryptocurrency declined, users withdrew more coins from exchanges than they deposited, suggesting holders were not spooked by the big mover lower.
Net flow of bitcoin to and from exchanges (inflow in green/outflow in red).
Net flow of bitcoin to and from exchanges (inflow in green/outflow in red).
  • Cryptocurrency exchanges witnessed a net outflow of 4,264 BTC on Sunday, marking a sharp rise from Saturday's figure of 436 BTC, according to data provided by the blockchain intelligence firm Glassnode.
  • Investors tend to pull funds out from exchanges when they expect a sustained price rally and move their coins to exchanges when they want to liquidate their holdings; for example, before an expected price drop. 
  • As such, Sunday's data would suggest that investors shrugged off the crash having confidence in bitcoin’s long-term prospects.
  • Sunday's flash crash is rumored to have been caused by an Asian whale, or big trader, who took profit on a long position after prices hit $12,000 amid thin volumes.
  • The resulting small price drop is said to have set off a chain reaction of forced unwindings of long positions by exchanges, rapidly leading to the bigger decline.
  • At the time of writing, bitcoin is back up near $11,200 – still up nearly 56% on a year-to-date basis.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.


Read more about