Bitcoin’s volatility has heated up and it is not just investors that are having trouble keeping up with the abrupt trends of the market. Several leading cryptocurrency exchanges such as Coinbase has transaction delays. But this time around, it is even more damaging.
Coinbase Causes Bearish Havoc
Many prominent individuals of the crypto space have been voicing out concerns for the platform. The latest one to do so was the famous Statistician and on-chain crypto analyst, Willy Woo who said that buys on Coinbase were not completing which led its to price $350 lower than other cryptocurrency exchanges.
He further noted that the platform failed to exhibit buying demand since buys were not being registered. This, in turn, pulled down the index price that futures exchanges utilize to calculate leverage funding, which triggered “bearish havoc” on speculative markets.
“Coinbase price is used in a basket of exchange prices to get an index price that futures markets trade on. Gives a false bearish signal to algos, which will trigger further sell-off.”
What is even more interesting is that Coinbase registered a record daily volume of nearly $10 billion on the 11th of January. To put things into perspective, the figure is more than the total volume for Q1 2019. In fact, yesterday’s trading volume was also larger than the total volume for January last year.
It can be safely said that Coinbase has experienced astonishing growth this bull run especially at a time when the platform was busy preparing to make its stock market debut.
However, the latest news was a setback for the exchange. As Woo explained, the latest pullback in the Bitcoin and the crypto market started on spot markets, which was then greatly amplified by a single exchange “partially failing”.
The market’s recent touchdown was unlike its previous crashes in the past 2 years, where over-leveraged markets lead by trader liquidation.
This isn’t the first time that the customers voiced their displeasure about technical difficulties on Coinbase that impeded activity at the platform, as it prevented them from taking advantage of the market activity.
Co-founder and CEO of Blockstream, Adam Back also commented,
“sheesh. Brain Armstrong, you’ve got to get a handle on this stuff. First, the continual crashing under load for weeks. Now, this. it costs people money. I had a leverage long liquidation myself, which this may have contributed to. (reopened with small slippage, but still).”