Bitcoin Flash Crash Below $25,000: Market Analysis and Price Outlook

Source: CryptoNewsNet Original Title: Bitcoin at $25,000: Crazy Flash Crash No One Observed Original Link:

Overview

Bitcoin (BTC), the leading cryptocurrency, experienced a dramatic plunge below $25,000 on Christmas Day. According to financial analyst Jacob King, this crash occurred on a major exchange’s BTC/USD trading pair.

What Triggered the Flash Crash?

According to King, the dip was a “flash crash,” which means that it happened suddenly, with very few users noticing it before it recovered. Notably, this crash, which exceeded 70%, occurred only on the exchange, not across the entire cryptocurrency market.

For perspective, the incident does not mean that Bitcoin crashed globally, but it was an isolated case on the exchange. It could have been triggered by low liquidity, large sell orders or liquidations of leveraged positions. These conditions may have resulted from fewer traders on the exchange at the time.

However, the crash below $25,000 did not last more than a few seconds before it rebounded back to $87,000. It is unclear if traders were able to quickly buy the coin at such a ridiculously low price before it rebounded.

Any purchase of Bitcoin during the dip would automatically give the investor over $62,000 per Bitcoin in unrealized profit.

Manipulation Allegations

Meanwhile, commenting on the same flash crash, DeFi researcher OxNobler claimed that the dip was a result of manipulation. He alleged that insiders went all in and quickly dumped the price to $24,000 to make a staggering profit from it.

Despite his claims of an insider job, OxNobler provided no concrete evidence to justify his allegations. Many in the community have dismissed his allegation as mere fabrication meant to create panic in the space.

Bitcoin’s Price Outlook

As of press time, Bitcoin is trading at $87,420.41, which represents a 0.7% increase in the last 24 hours.

Market data shows the coin has remained between a low of $86,411.80 and a high of $87,956.88 within this period. However, the trading volume remains low by a significant 34.28% at $21.67 billion.

The slight uptick in price comes as the hash rate declined by about 4%. History reveals that miner capitulation has often preceded the price rebound of the coin. This occurs as weaker operators quit the scene, leading to reduced selling pressure on the market.

There is still optimism that Bitcoin might make one last push for the psychological $100,000 price level before 2025 ends.