Chainlink For $0.01? LINK Flash-Crashed By 99% On Binance Exchange

Until a few hours ago, Chainlink, the decentralized-oracle, had a market cap of over $1 billion as the 11th biggest cryptocurrency by market cap. Today the LINK token is among the worst-performing digital assets, following a massive price slump. Its situation got even worse on Binance, where it flash-crashed to a low of $0.01 (!) before quickly recovering.

Chainlink (LINK) For $0.01

The cryptocurrency market is going through one of its worst trading days in history. Most coins are noting double-digit losses as some of the major ones are even dropping by 30 – 40% over the past few hours. Unfortunately for Chainlink (LINK), it’s one of the leaders in this category.

Only a week ago, LINK was at its all-time high price of almost $5. Today, though, the popular alternative coin nosedived and is currently trading at $2.25, marking a 55% decline on the weekly.

However, the pair LINK/USDT noted an even steeper drop on Binance. Chainlink experienced a sudden flash crash on Binance, the leading cryptocurrency exchange by trading volume, and it plummeted to as low as $0.0136.

LINK/USDT 1h. Source: binance.com
LINK/USDT 1h. Source: binance.com

 

Even though the price of the asset recovered almost immediately, this is still a 99% plunge. Similar events could have a critical impact on traders. Such steep price movements could liquidate long positions as a domino effect.

Interestingly enough, some crypto community members described LINK’s performance up until today as a potential safe-haven asset. During the last days of uncertainty in the market, Chainlink’s price was somewhat stable. However, the recent developments reversed the prevailing opinion on the matter.

What Is a Flash-Crash?

A flash crash is an event that rapidly decreases the price of a traded asset before it bounces off to its previous point. Usually, it takes place on one exchange or one market. The leading cause of flash-crash is an execution of a ‘market’ command with a size that covers the whole order-book. Unlike limit orders, Market command means to sell at the best available price.

Binance has had its fair share of previous cases. In late 2019, Bitcoin noted a severe flash crash as well. BTC/USDS dropped to $680, before recovering to the regular price of $7,450, at the time.

Again in 2019, WAVES marked one of the most significant flash-crashes ever. It dropped by 99.9% to 10 SAT in the WAVES/BTC market.

Such events took place on other popular cryptocurrency exchanges. Bitcoin flash plunged by $1,000 on Kraken in an instant crash, before it quickly recovered. Another example came from Poloniex and, this time, it involved the second-largest cryptocurrency by market capitalization. Ethereum fell by as much as 20% when trading against Bitcoin.

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Source: Crypto Potato