Yo, what is going on youtube? So, after an incredible week in the cryptocurrency market, we saw bitcoin experience a flash crash going down nearly 14 in less than a single hour. The price went from 59 000 to 51, 000 and right now, it's back at 55, 000.. So in this video i want to cover a couple topics first, by starting out with what we can learn from this flash crash and why this may actually be a healthy movement for the market. I'm also going to share with you towards the very end.

What i'm doing with my trades and what i recommend you to do as well moving forward into the future, i know for a fact. The learning curve to cryptocurrency is pretty steep compared to many other investments, and i know a lot of new investors can be quite intimidated by the whole community. I spend hours and hours and hours every single day researching into this space, so i can break this down for any new beginners who are looking to become an expert. I got a lot of great videos lined up for this week.

Breaking down this all season, sharing with you how to make more money and talking about the overall crypto market with tutorials and fun guides. So if you really do enjoy this type of content subscribe like check out the links down below and other than that, let's just hop right into this video. So to begin, the overnight crash that saturday happened with man, it tanked the whole market and, if you didn't know it tanked the market so much, it was 310 billion dollars in less than 24 hours. This took the 2.2 trillion dollar market cap all the way down to less than 1.9 trillion, and as of now, we are closely approaching the two trillion dollar market cap.

Once again, i know many new investors who probably weren't even paying attention over this weekend. Just might not have noticed any type of change at all, but i do believe it's extremely important to actually go through this and dissect some of the learning lessons that we've had from this. So you don't get caught up in another flash crash or you're able to capitalize on this opportunity and make more money for yourself all right. So to begin, i've read a ton of theories on why this flash crash happened and i wanted to share with you all of the ones that i found in this video here and then right after that.

We'll just go through some of my thoughts. Okay, so i think this is probably one of the best threads that i could find just going in depth talking about the climate of where we're at with bitcoin and some of the reasons behind the entire flash crash of this weekend. So, to begin, here's what we got adam cochran says so a lot of people think that the treasury rumor, which is painfully false, caused the crash we'll talk about the treasury rumor in a little bit after we go through this thread, while maybe it was a contributing Factor it certainly wasn't the cause. My current working theory is that there could have been an exchange issue driving this first off.

A lot of things had to go wrong for an experience like last night to happen. You can think of it like moments in history. That sparked wars. There were the right set of conditions, a catalyst that caused the acceleration and a spark that caused it to erupt weekend.

Markets are the right condition for disaster, where you have low liquidity. This impacts us more and more as we go on as institutional involvement gets larger and so weekdays have a higher average liquidity. Now, if you have been invested into the market, for i would say this past year, or so even generally the past few months, you'll notice that on the weekends, the price of a lot of cryptocurrencies seem to fall. While on the weekdays, it seems to climb up now, no one knows the exact theory behind why this happens.

But liquidity is definitely one of the answers. If we talk about institutional involvement, which, in layman terms just talks about giant big banks with money going into cryptocurrency and because they have so much money, we also call them the whales when they invest. They single-handedly have the potential to move the price of bitcoin based on what they're doing now. This can be a good thing, and this can also be a bad thing.

Institutions, right now are deciding to invest in cryptocurrency to make sure that their money is not getting wasted by all of the pumped up stimulus that we have from the market and the impending doom of the inflation that i feel like is going to happen very. Very soon, we'll talk more about that towards the end of the video. But let's just continue on to this thread. He continues to say, then you have the catalyst.

This was the fact that the market had been filled with fomo and exchanges, we're allowing any retail user to use up to 100x leverage, and i mean anyone if you can get your test answers wrong on binance. It just corrects them for you and lets you in so this really emphasizes the fact that it's very easy to get leverage or to get additional money. That is not yours. In order to trade on this can be very dangerous for a few reasons, i'm sure most of you guys are familiar with options trading and just some of the negative side that we've seen the upside.

Yes, it's great you're able to make money that you don't have, but trust me when the market does go to poop and they they margin call people boy. Oh boy, can we see some pretty detrimental effects? Like we've seen with this flash crash, he continues to say we had a lot of crypto gurus, promoting long dead coins for massive pumps and i'm talking about coins that i'm not sure even have development teams anymore. Meanwhile, many of them were hedging into cash positions. So i do want to touch up on this, because this is a huge, huge issue that we've seen in the space and i feel like if it does get worse, there is going to be some type of lawsuit or regulation.

There are some crypto gurus channels, not even on youtube but twitter, where they do promote these long term like these, these cryptocurrencies that are complete trash that are completely dead. They do this because they already have positions in them. They tell people to buy into them so that they can leverage their position and then sell out and have people holding the bag. This is awful for the community and there are crypto projects that have literally gone under that you don't even talk about nowadays that people are trying to bring back alma says this in the crypto space.

It can get shady be careful about the people. You watch make sure that you're able to have good vibes about people you trust that are giving you information. I personally just watch only a handful of crypto uh youtubers in the space, because i know that there are some other much smaller channels that do practice this, and it is it's really really dangerous. Adam cochran continues to say this sets up a pretty dicey, futures market and that's even worse, on retail heavy exchanges like binance as the order book is pretty tightly packed around the price and thin when it comes to backstops.

But the spark the spark that sets off the largest single day set of liquidations in crypto history. I don't think that was anything to do with a poorly sourced inaccurate tweet on a heavy english website at midnight on a saturday. Instead, i think something worked on someone's books. Usually a dip like this is a small dip that gets exaggerated by either an engine or operations failure.

It was binance that led the market in dips and specifically binance features. We know this because the futures market is what tanked the hardest fastest and furthest. In fact, on binance, the drop was so bad that you were able to pick up long-term futures at prices well below the spot market. That tells me that something was failing in terms of arbitrage or backstop, but that it started in the futures market and everything else was being dragged down with it.

I think what we saw was a cascade of tightly wound retail positions on a weekend market get toppled, but somewhere along the lines. There was a matching book fail that caused stop losses to not get hit, and when that happened, it put a massive 63 million dollar position in jeopardy. That 63 million dollar position getting liquidated is what put the markets in major jeopardy. But by that time there were already degraded performance issues connecting to binance and spiking gas fees.

So there was very little way for anyone to backstop or arbitrage that liquidation. It likely set off another cascading round of liquidations on a thin book, but connectivity or outage issues drove this. That's why the market was so inefficient for over an hour after the event. Now, if you did trade on any platform, even like coinbase coinbase pro crypto.com, most of the major exchanges were having issues during this whole f, flash crash crash splash crash cash brown.

There were all sorts of arbitrage opportunities, weird flash sales and mismatched options, futures last night, which big trade firms really work hard to capitalize on the opportunity. So when you see those appear, it usually means access issues. Whenever the crypto market is high, people out there publish and cycle through various fund messages trying to drop the market, so they can gain on shorts. These happen dozens of times, but usually they go unnoticed.

Once we have a major market drop, we tend to go looking for a single obvious spark that caused the issue externally and can over correct a weak evidence just because it is an easy narrative. What you had here is a typical weekend, behavior magnified by over leveraged new retail and a technical stress test, failing leading to a perfect storm, no evil, boogeyman banning or criminalizing crypto etc. But i also don't buy that it was just liquidations, because i know plenty of trading firms who had cash on hand and would have had a willingness to start buying up those liquidations long before the huge drop. So i think there was likely a systems hiccup somewhere.

As well, when you look at the usual suspects, coinbase dips were in the average range. Kraken lacked the volume to cause a dip. This big and ftx ran smooth as butter, so that really leaves binance, although i'm not sure we'd ever get clarity on the issue. If one happened anyway, 20 to 30 corrections are not unheard of in a bull market, but we should expect the cycle to be the same as we've got much more robust systems of backstop and arbitrage and much more system in the money.

Sorry i switched those and much more money in the system, but that doesn't mean those emergency brakes can't ever fail. We may see a bit more fear-based selling from the now shaken new retail, but i think the worst of it is over and we'll likely see a lot of hungry institutions buying up at these rates come monday. Ps reminder: this is a working theory and it's possible for us to get the data we need to know for sure. So all we can do is take educated guesses and try to interpret the market.

So pretty much touching upon that theory, i wanted to talk about several more that i was reading up online, so yahoo news stated what could have caused the dump, while nothing can be confirmed as to what led to the massive liquidation event. Several potential reasons have been marked as possible: causes unconfirmed speculation, points to the u.s treasury, possibly set to charge several financial institutions for money laundering through the use of crypto. While this has not been formally announced anywhere, the news did gain traction on twitter, so this was the actual tweet itself us treasury to charge several financial institutions for money laundering using cryptocurrencies. Another possible cause relates the potential decline in the bitcoin mining hash rate.

On-Chain analyst will woo speculates that a blackout in xinjiang was the cause of the price drop. Wu explains that the hash rate drop is similar to the one experienced in november 2017.. Wu believes the correlation between bitcoin's price drop and the hash rate drop are the reason for the flash crash experience on sunday. So he pretty much summarizes this here.

It's a little bit more of a different theory from the initial one that we read, but i think it's good to just take in as many different guesses and point of views and perspectives on the reason why we saw a drop like this happening now, really the Basis of this that you need to know is that, as soon as the hash rate began to collapse, that's when the price of bitcoin started to go down now as important as it is to understand some of the different perspectives and point of views on something enormous. Like a flash crash to occur, especially in the cryptocurrency world, i believe it's just as important to understand the final thoughts and what you should be doing in terms of action. During these times, we see another potential flash crash coming up in the future. You know, should you be sitting on it, should you be selling out before anything like that happens, or should you be buying in so for me, anytime? I see a dip like this.

It's a chance for me to buy in. I went ahead and bought another 50. 000 worth of bitcoin litecoin ethereum and several other all coins that i'll be discussing in my next video. Now i wanted to take this time to give you a reminder on the macroeconomics and where we stand in today's market right now, i think it's safe to say that there's still a lot of distractions going on in the crypto world.

This is because a dogecoin updates to various networks, ethereum 2.0 nfts, more d5 products and new all coins getting listed on the market every day. But i feel like the attention, has really started to shy away from the real value of what cryptocurrency is and why. We've been seeing such an enormous bull run for the past year. Here in the united states, the government has printed trillions of dollars alongside many other countries, although we haven't felt the true impact of inflation, yet many large investors and institutions from all over the world are preparing for this impact.

We've seen huge companies this past year begin to invest in cryptocurrencies, such as bitcoin simply for the aspect of having a non-inflationary asset and the fundamentals on that haven't changed. Money is getting printed, the value of the dollar is going down. Banks and institutions, much smarter than we are, are expecting this exact issue and pouring billions of dollars from their balance sheets into bitcoin and other cryptocurrencies. They are doing this, so they don't lose out on millions of dollars just by holding this cash.

I believe this flash crash was able to give us the confidence in the market of 2021 compared to the last crash of 2018.. The easiest decision, though, through all of this guys, is to just hold your investment, know your exit strategy and if you want to invest more continued dollar cost averaging into the market, i'm keeping my eye out on the overall market movement for the next few weeks to Gauge, whether or not i'm gon na start averaging out some of my investments, if we zoom out of the one week or the one month performance, this bull run has truly been spectacular if april ends up being red month, which would be quite surprising. I am personally continuing to invest more in the market and holding my other investments, make sure you check out my most recent video on the top four most underrated cryptocurrencies to invest in 2021 to get a better idea of what i'm investing into and why they're? Not all just small market all coins, which i do have a portfolio in it's gon na, be major players that i personally vouch for like ethereum chain link v chain, and i talk about some of the reasons in more detail in that video now guys. Thank you.

All so much again for watching this video, let me know what your thoughts are down below. Don't forget to check out the links down below in the description you can check out crypto.com, you got 25 with them. If you sign up for that visa ruby steel card, you have to stick 400 with them and you'll get that you get ten dollars with coinbase using my link and you also get two free stocks valued up to eighteen hundred dollars with weeble. Not a bad deal check out my links down below in the description.

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