Concerns concerning possible market manipulation have been expressed in light of the current Bitcoin (BTC) sell-off, particularly with reference to spot selling on Binance. These statements are clarified by a careful analysis of the data, which also offers important new information about what actually happened during the sell-off.
At 8:09:31 UTC, when 113 BTC in sale volume was noted on Binance, the sell-off got underway. When compared to Bitfinex and Coinbase, Binance saw a notable increase in spot sales of more than 0.5 BTC. The price fell from $29,860 to $29,730 as a result of 86.2 BTC worth of sales in only eight seconds during the second leg down, which happened on low volume.
Significantly, amid the sell-off, Binance’s BTC-USDT 1% bid depth saw a sharp decline. As the sell-off started, it plunged by a third in only one minute and went from 600 to 240 BTC in just two minutes. It appears that the decline started on Binance, when someone sold a sizable spot position into weak order books, according to data from other exchanges.
Despite having around half the liquidity, the BTC-TUSD market appears particularly unliquid given the volume it saw, which was almost three times the BTC-USD volume on Coinbase. The nature of the sell-off and whether it was planned or the consequence of actual market swings are questions that are raised by this disparity.
Although it is difficult to say for sure if the Bitcoin sell-off was engineered, the data points to the possibility that a sizeable spot position was sold on Binance into a sparsely populated market, which caused a big price drop. Trading and investing professionals should be aware of such events and use caution when navigating the sometimes unpredictable market.
