Kraken: Flash Crash pushed Ethereum down to USD 700 – what was going on?

Ethereum last traded at $ 700 in December 2020 – the older ones will remember. On the Bitcoin exchange Kraken, ETH was again available at a bargain price for a short time – what is behind it?

Rarely are exorbitant profits and devastating losses so close together as in crypto trading

But what happened on the Kraken crypto exchange on February 22nd should have caught the toughest lever trader cold. In the course of the severe correction on the crypto market , Kraken experienced a veritable flash crash with individual crypto currencies. In addition to Cardano and Polkadot, this particularly affected the Ether course (ETH). Within a few minutes, Bitcoin Millionaire had fallen by $ 1,000 to $ 700, only to jump back to pre-crash levels shortly afterwards.

There was a strong dip on other Bitcoin exchanges at the same time. Nowhere, however, has ether fallen as violently as on Kraken.

Ether course on Binance at the time of the flash crash on Kraken. Source: TradingView .
The question therefore arises why, of all things, Kraken assets such as Ethereum, Polkadot and Cardano made such a belly landing.

Coinmetrics: Incorrect Match Making Caused Ethereum Flash Crash on Kraken

For Kevin Lu from the blockchain analysis company Coinmetrics, the matter is clear: He suspects an incorrectly programmed trade making engine behind the Ethereum Flash Crash on Kraken – “today’s market crash is presented to you by Kraken’s defective trade matching engine” ( Twitter) .

The Coinmetrics analyst decorated his tweet with a graphic that compares the sharp swings in the Ether price on Kraken with the price behavior on other Bitcoin exchanges at the same time.

With his tweet, Lu called the stock exchange boss himself on the scene.

CEO Powell denies mistakes

Jesse Powell describes the allegation as „speculative“ and „irresponsible“:

Hi Kevin, I am a fan of @coinmetrics, but don’t you think it is irresponsible to make misleading, denigrating and defamatory statements based on your own speculation without having direct information? I’m sure you can come up with a plausible alternative. I hope you make a correction.

Jesse Powell via Twitter