Flash Crash

A flash crash in crypto refers to a sudden and drastic drop in the price of a cryptocurrency or a significant increase in volatility, followed by a rapid recovery within a short period, usually minutes or hours. These events are often characterized by extreme price movements and high trading volumes, leading to panic selling or buying among investors.

Examples and cases of flash crashes in cryptocurrency include:

1. May 6, 2010 - Bitcoin Flash Crash: Bitcoin experienced its first major flash crash, dropping from $41 to $0.01 on the Mt. Gox exchange within minutes before recovering.
2. June 21, 2017 - Ethereum Flash Crash: Ethereum's price plummeted from over $300 to as low as $0.10 on the GDAX exchange in a matter of seconds before bouncing back. The crash was attributed to a multimillion-dollar sell order triggering a cascade of liquidations and panic selling.
3. September 2018 - Flash Crash Across Multiple Cryptocurrencies: Several cryptocurrencies, including Bitcoin, Ethereum, and Ripple, experienced a flash crash simultaneously, with prices dropping by double-digit percentages within minutes on various exchanges. The cause of the crash was unclear, but it was speculated to be due to large sell orders or trading bots malfunctioning.
4. March 12, 2020 - COVID-19 Market Crash: Cryptocurrency markets, along with traditional financial markets, experienced a flash crash triggered by the COVID-19 pandemic. Bitcoin's price dropped by over 50% in a single day, reaching a low of around $3,800 before recovering partially.

These examples illustrate how flash crashes can occur in the cryptocurrency market due to various factors such as large sell orders, market manipulation, technical glitches, or external events impacting investor sentiment.