Shiba Inu (SHIB) experienced a notable price anomaly on Coinbase, one of the largest U.S.-based cryptocurrency exchanges. The asset's value momentarily plunged by approximately 55%, declining from $0.000044 to $0.00002, before quickly recovering.
This incident occurred amid a broader upward trend for the meme-inspired cryptocurrency. SHIB had been rallying consistently over recent days, breaking through several resistance levels and attracting substantial trading volume.
Understanding the SHIB Price Movement
Shiba Inu began its upward trajectory on February 26, climbing sharply from $0.00000968. By March 2, it had reached the $0.000022 mark, though it encountered selling pressure at that level.
The asset resumed its bullish momentum later, surpassing the $0.00002 range and closing on March 4 at $0.00003599—an intraday gain of nearly 60%. The positive sentiment continued into the following day, with SHIB climbing to a high of $0.000044.
The Sudden Drop on Coinbase
At approximately 04:00 UTC, Coinbase reported an unusual and rapid price decline. SHIB fell from $0.00004441 to $0.00002000 within a short period, representing a drop of about 55%.
Data from TradingView confirmed that the drop was most severe on Coinbase compared to other major exchanges. While platforms like Kraken, Binance, Bitstamp, and Gemini also saw price dips, none were as sharp as the one observed on Coinbase.
Possible Causes of the Flash Crash
The extreme volatility appears to have been caused by a large sell order that temporarily overwhelmed the order book on Coinbase. When market depth is insufficient to absorb such orders, prices can momentarily crash before stabilizing.
This kind of market activity is not uncommon in highly volatile asset classes like cryptocurrencies, especially those with large but relatively illiquid order books.
Coinbase is one of the top exchanges by trading volume for SHIB. At the time of the incident, it accounted for approximately 12.8% of global SHIB trading volume, with nearly $1.77 billion in trades.
Market Recovery and Response
Following the flash crash, SHIB prices quickly rebounded across all exchanges. Within hours, the token was trading around $0.00004024, close to its pre-crash levels.
No user trade settlements were reported to have been negatively affected by the momentary price dip, indicating that exchange systems functioned as intended despite the volatility.
Historical Context of Exchange Instability
This is not the first time Coinbase has experienced technical challenges during periods of high market activity. The exchange previously encountered issues during sharp Bitcoin price movements, including display errors and temporary system outages.
Such events highlight the importance of robust market infrastructure and risk management mechanisms, especially during periods of extreme volatility.
Frequently Asked Questions
What caused the SHIB price crash on Coinbase?
The crash was likely due to a large sell order that exceeded available buy orders in the order book at that moment. This caused a temporary liquidity crisis, leading to a sharp but brief price decline.
Did the flash crash affect other cryptocurrencies?
While other exchanges saw minor dips, the flash crash was mostly isolated to Coinbase. Other assets and platforms remained largely stable during the event.
Should investors be concerned about such price swings?
Short-term volatility is common in cryptocurrency markets. Investors should be aware of the risks and consider using risk-management tools such as stop-loss orders 👉 Explore more strategies.
How quickly did SHIB recover after the crash?
SHIB rebounded within hours, returning to price levels near those before the flash crash. This suggests strong underlying demand and market resilience.
Can traders profit from flash crashes?
While some traders attempt to buy during sudden dips, such strategies are high-risk and require quick execution and deep market knowledge.
What measures can exchanges take to prevent flash crashes?
Exchanges can implement circuit breakers, improve market depth, and encourage larger liquidity providers to participate 👉 Get advanced methods.
In summary, the Shiba Inu flash crash on Coinbase was a short-lived event driven by order book dynamics. The market’s quick recovery demonstrates both the volatility and resilience of cryptocurrency trading. Investors are advised to stay informed and use prudent trading strategies during periods of high market activity.