Bitcoin Experiences Sudden Flash Crash to $24K on Binance USD1 Pair

Bitcoin saw a rapid flash crash, plummeting to around $24,111 on the BTC/USD1 trading pair on Binance, only to quickly bounce back to around $87,000 within seconds.

Key Takeaways

Bitcoin faced a flash crash to approximately $24,111 on the BTC/USD1 pair before bouncing back quickly.
This flash crash was linked to USD1, a stablecoin supported by World Liberty Financial.
Flash wicks occur when liquidity drops and there are fewer orders on the books.
The quick price recovery reflects the absence of broader market support for such a spike.
Experts stress the need for sustained buying pressure for genuine market rallies.

Understanding these fundamentals is essential for anyone navigating the world of cryptocurrency and Bitcoin trading.

According to data from the exchange, this movement was notably linked to USD1, a stablecoin backed by World Liberty Financial, associated with the Trump family.

Bitcoin flash

Binance chart

This occurrence is referred to as “flash wicks,” which typically happens when market liquidity decreases and order books become less robust. Meanwhile, the BTC/USDT trading pair has maintained its stability after the incident.

Understanding Bitcoin’s Flash Wicks and Quick Recovery

Flash wicks often emerge during quiet trading hours when market makers retract their activity. In these times, substantial buy or sell orders can traverse multiple empty levels, resulting in a sharp price spike that appears similar to a market breakout.

Moreover, the swift recovery of the price indicates that there was no significant market movement to justify such a spike.

“Many spot investors find themselves back in a similar situation as they were prior to the flash crash,” noted Nic Puckrin, a crypto analyst and co-founder of The Coin Bureau, in a statement to Cryptonews.

“This certainly highlights the risks of utilizing excessive leverage in a market characterized by changing liquidity and an unpredictable geopolitical landscape.”

Temporary pricing discrepancies can also lead to such erratic movements. These price shifts generally arise from inaccurate quotes or the behavior of trading bots.

Experts consistently highlight that genuine market rallies require sustained buying support and increasing trading volume. In this instance, trading volume was relatively low, leading to a swift return to the prior price levels.

BTC Price Trends Bearish – What’s the Next Move?

In the last 24 hours, Bitcoin has gained 0.89%, reaching $87,693.65—slightly higher than the overall crypto market's increase of 0.83%. However, Bitcoin’s price has significantly dropped from its peak in October, which exceeded $126,000. Currently, it is trading at approximately $87,773, according to CoinMarketCap.

Market analysts suggest that Bitcoin is currently consolidating within a descending “triangle pattern,” trading below the 21-day moving average (21MA), which is serving as a resistance level. A clear breakout or breakdown from this pattern would indicate the next directional move for Bitcoin.