The dramatic price movement of Wrapped Bitcoin (WBTC) today, where it reportedly dropped from $97,000 to $5,200 and then rebounded almost instantly, is attributed to a "flash crash." Such events are typically caused by factors like low liquidity, algorithmic trading errors, or market manipulation.
In this instance, on certain platforms or trading pairs, a lack of buy orders at specific price levels may have caused the sharp decline. Once the price hit the bottom, automated systems and traders capitalized on the low price, quickly driving it back up. Exchanges or DeFi platforms experiencing technical glitches or unexpected sell pressure can also contribute to these rapid fluctuations【8】【9】.
Flash crashes often highlight vulnerabilities in the market's structure and the risks of low liquidity in certain trading environments. If you're directly impacted, reviewing trades and checking with the involved platform for specific causes or potential refunds might be prudent.
