Bitcoin (BTC) spiked to $56,000 on Bitfinex futures on Tuesday, a level not seen since December 2021. However, the price increase was extremely short-lived and quickly slumped to around $28,000, where it has been trading since last month.
The reason behind the abnormal candle wick is unclear, but some think it may be due to a glitch, a fat-finger error, or a manipulation attempt by a large trader or a group of traders.
A fat-finger error is an error caused by a human rather than a computer and incorrect data was entered. Fat-finger bugs are usually harmless, but sometimes they can have huge implications, depending on how far-reaching their impact is and how long it takes to catch them.
For example, in the financial markets, a fat finger error can occur when a trader presses the wrong key or mouse button while placing an order to buy or sell an asset such as a stock or currency. This could result in an order of a much larger size than intended, for the wrong asset, at the wrong price, or with any number of other entry errors.
On the other hand, the fact that this rise is exactly the day the FED meeting started, “could there be a move by the whales with inside information?” brought to mind his theory. As it is known, the Fed’s interest rate decision will be announced tomorrow after the meeting that lasted for 2 days.
However, most trading platforms have filters or mechanisms to prevent or cancel erroneous orders before they are executed.
Futures are very popular with traders looking to strengthen their positions and increase their profits or losses. However, they can also carry a high risk of liquidation if the price moves against them.
*Not investment advice.