Crash in motion
This trend, Danielli argues, came to head at roughly 1:00am UTC on 14th August with one large sale order on Bitstamp that caused 500 BTC to be sold in one minute, pushing the price down to $525.
Prices on Bitstamp and Bitfinex began to decline, and as the price of bitcoin on these exchanges neared $520, a “breaking point” was hit, he said.
“After this point, Bitfinex started to liquidate positions of traders who could not cover their margin anymore and selling their positions in the open market,” he continued. “This increased downward momentum and subsequently more traders got hit with margin calls.”
This, Danielli asserts, caused the price to crash to $451 on Bitfinex before the markets could recover. However, Bitfinex offered a different take on the events.