Coinbase had said they would add BCH to their exchange before the end of the year months ago. And people had noted BCH appearing in their API a day or two ago, and then the trading pages were up for an hour or two before the official announcement, with some very large orders being placed in advance of trading going live, with the price already set at $1000 dollars higher than any other exchange was offering.
Add to this the fact that anyone who held BTC on Coinbase in August receiving BCH, plenty of people still holding BCH from the last time the price spiked, and the exceptionally deep pockets of certain people/groups who are supporting BCH.
You didn't need to be a Coinbase employee to know this was coming, and that it would, at least short term, have a significant effect on the price. Crypto traders live on big news and swings like this, and it was inevitable that it would be a big event.
If I scroll to a week ago between 13th and 14th there is an identical pattern. There is accumulation and then a pump followed by sell: https://imgur.com/a/Hysfc
Is this also related to Coinbase?
Ps: I don't trade, I'm a hodleur
I don't know if that makes it special, but it does mean it's something different from, say, Bitcoin Diamond or Bitcoin Gold.
All of the exchanges are repeating mistakes already learned by the financial industry.
It's why they'll always be amateurs until an actual major financial institution devotes serious time/effort/money to it.
In a way, it's interesting to see this sort of recapitulation take place.
Do you mind giving some context to this statement? What I know of the ECNs you mentioned is from reading the book 'Dark Pools'. It would be great to get some insight into the innovations that were developed in all three projects, that have become a mainstay in 'fintech'.
ECNs were f!cking amazing and when Datek started routing limit orders to Island (genius play) from retail investors the days of crazy spreads, slippage and free money became history. Some of them also allowed you to do cross-exchange routing - I think BRUT was first to do it - so you could send your order via BRUT to a specific exchange. This killed NYSE/PHL/AMEX arbitrage (AMEX and PHL were slower than NYSE so it was possible to do a trade on NYSE and take offsetting position on PHL/AMEX immediately locking the spread)
Since ECNs would self-cross at the NBB and NBA even if the market had no action because the likes of NITE and GSCO were slowing down just to get better money on the order flow, the trading simply moved to Island and Instinet forcing regular market makers to play ball.
The effect of ECNs in trading was equivalent of introducing Ansible and Puppet management in server management. Crypto-exchanges now act the same way as the who who say "We only manage our servers using Vt100 terminals using vi"
NBB is "national best bid" and NBA is "national best ask"
Buy|Sell
1000@5|[email protected] <-- top of the book/best price
[email protected]|[email protected]
..
..
..
100000@1|1000000@10000 <--- bottom of the book, worst price - this is "sucker catcher". If someone clown with more money than brains throws a marker order with the quantity higher than posted by everyone above, it will catch the bottom of the book.
At this point no trades are happening because no one is offering to buy at a price that someone else is willing to sell.
A market order is an order that does not specify the price. Only action and qualities. This is the only type of an "immediate" order because as long as there is anyone on the other side willing to sell or buy a quantity, it will be executed against the most eligible entry ( top ) of the book.
What happens when you do a limit order? The limit order "Buy [email protected]" will be inserted into the book based on the price so with this order the book will look:
1000@5|[email protected]
[email protected]|[email protected]
..
..
..
100000@1|1000000@10000
As you can see still nothing is trading because there's still a spread.
What happens if someone does "sell 5000@5" against the book above:
1000@5|5000@5 <--- locked market
[email protected]|[email protected]
[email protected]|[email protected]
..
..
..
100000@1|1000000@10000
The market is now locked - there's someone who wants to buy @5 and someone who wants to sell @5. Result of this is automatic market unlock:
[email protected]|4000@5 <--- unlocked market
[email protected]|[email protected]
..
..
..
100000@1|1000000@10000
with a single 1000@5 traded so the "new price" of the asset is now @5
What happens when trading is suspended and market "ran away" i.e. significantly moved. Nothing special actually. All non-canceled orders are entered into a queue in an order of entry and are executed based on the book replay as if there was no suspension at all.
At the time it suspended it, the company was quoting a price of about $8,500.
Trade of Bitcoin Cash was frozen just four minutes after it began on the firm's Global Digital Asset Exchange (Gdax) and existing orders were cancelled.
So the prices more than doubled in just 4 minutes. It might not even be a case of insider trading rather very, very thin order book.
That is why this happened:
https://status.gdax.com/
> Update - All BCH markets will remain cleared and offline until 9am PST 12/20/17. At that time, BCH markets will enter post-only mode for a minimum of one hour to allow liquidity to be established.
That is to say no matching orders allowed of any kind - limit or market which can suck the liquidity and cause a huge price jump.
One might think that Coinbase/GDAX understand liquidity and market making after so many years. But no. Makes you wonder what kind of stuff is going on in other exchanges.