{"id":48086,"date":"2025-02-26T23:00:18","date_gmt":"2025-02-26T23:00:18","guid":{"rendered":"https:\/\/mycryptomania.com\/?p=48086"},"modified":"2025-02-26T23:00:18","modified_gmt":"2025-02-26T23:00:18","slug":"crypto-market-sees-record-flash-crashes-whats-going-on","status":"publish","type":"post","link":"https:\/\/mycryptomania.com\/?p=48086","title":{"rendered":"Crypto Market Sees Record Flash Crashes, What\u2019s Going On?"},"content":{"rendered":"

The crypto market has experienced an unprecedented surge in volatility, with established coins like Bitcoin and Ethereum facing extreme price swings. Since January, the frequency of flash crashes has risen sharply<\/a>, erasing billions from the market. A crypto analyst has suggested that these flash crashes have been driven by several factors, providing a detailed insight into what\u2019s really going on in the market.\u00a0<\/p>\n

Why Flash Crashes Are Occurring In The Crypto Market<\/h2>\n

A crypto analyst known as \u2018The Kobeissi Letter\u2019 has shed light<\/a> on the recent market crash and why top coins are falling drastically. The analyst revealed that the increasing number of flash crashes has resulted in over $300 billion being removed from the market in just 24 hours.\u00a0<\/p>\n

He disclosed that on the previous day, the market began selling off, with Bitcoin dropping below the $95,000 mark<\/a>. Between 1:45 AM ET and 2:15 AM ET, the cryptocurrency had one of the most shocking crashes, falling by $5,000 in mere minutes.\u00a0<\/p>\n

Ethereum, the second largest cryptocurrency after Bitcoin, had it even worse. The altcoin experienced massive liquidations that contributed to a 37% price crash<\/a> on February 2, fueled by trade war headlines.\u00a0<\/p>\n

The Kobeissi Letter has revealed that the key factor behind these dramatic flash crashes is the growing divide between institutional and retail investors<\/a>. Wall Street Hedge funds<\/a> have increased their short positions on Ethereum by 500% since November 2024, marking a historic level of institutional bearishness toward Ethereum. Short positioning in Ethereum has also increased<\/a> by over 40% in just one week. Moreover, Ethereum\u2019s price is down by approximately 40% since December 2024, while Bitcoin has fallen by 15%.\u00a0<\/p>\n

On the other hand, institutions have continued to accumulate Bitcoin<\/a>, while retail investors have poured capital into smaller altcoins like Solana, <\/a>creating extreme volatility in these assets. This \u201cpolarization,\u201d as the analyst calls it, has led to the formation of \u201cair pockets\u201d in liquidity. As a result, when a sell-off starts, it triggers cascading liquidations, amplifying market instability and price crashes<\/a>.\u00a0<\/p>\n

The analyst has also pinpointed that this polarization phenomenon works in the opposite direction, as the market can experience rapid recovery, leading to billions added to its market cap within hours.\u00a0<\/p>\n

Shifts In Sentiment And Political Influence Contribute To Market Crash<\/h2>\n

The Kobeissi Letter revealed that the Fear and Greed Index has fallen from a bullish stance just weeks ago to 29% extreme Fear<\/a>, underscoring the speed at which the market\u2019s sentiment is changing to the negative. The analyst suggests that the extreme positioning in the crypto market is leading to these increasing flash crashes, making crypto significantly unpredictable.\u00a0<\/p>\n

Adding to the turbulence, the analyst revealed that political and corporate influences have been dictating the crypto market. He underscored that Eric Trump had publicly supported buying Bitcoin and Ethereum<\/a> during dips, aligning with events like Ethereum\u2019s February 3 recovery and Bitcoin\u2019s rebound on February 25.\u00a0<\/p>\n

While the market experiences flash crashes<\/a> and instability, MicroStrategy continues to accumulate Bitcoin. The analyst revealed that the company had also contributed to the polarization of Bitcoin due to its unending accumulation trend<\/a>. While the company buys more Bitcoin, MSTR stocks continue to fall, marking a 45% decline from their high on November 20.<\/p>","protected":false},"excerpt":{"rendered":"

The crypto market has experienced an unprecedented surge in volatility, with established coins like Bitcoin and Ethereum facing extreme price swings. Since January, the frequency of flash crashes has risen sharply, erasing billions from the market. A crypto analyst has suggested that these flash crashes have been driven by several factors, providing a detailed insight […]<\/p>\n","protected":false},"author":0,"featured_media":48087,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-48086","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/48086"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=48086"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/48086\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/media\/48087"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=48086"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=48086"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=48086"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}