theblockcrypto.com/daily/96967/kr
probably cascading liquidations + not enough liquidity
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ya it's a good question. If there's no leverage it matters less: no one is compelled to trade, and so if there isn't "enough" liquidity people can just not sell.
But liquidations --> forced selling --> demand for liquidity.
I could be wrong! Was the crash driving by liqs?
This is not enough liquidity. Anyone leveraged without a stop on ADA on Kraken got annihilated.
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Anyone with stops got rekt too. All stops were forced closed, many of them at market prices far lower than their stop.
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What about their server failure, API failure and order book volume to Zero. Are they just “bad trades” by customers Jesse?
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☝️The margin pool is always used up. Couple that with the trading api freezing up under load.
Can cascading liquidations alone explain why multiple books crashed at the same time?
Several things need to happen for a liq crash: skewed trade flow, relatively thin books, market-makers unable or unwilling to react.
"Low liquidity" is a necessary cause, but not sufficient
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I'm not implying anything nefarious here—I think Kraken & team are trustworthy.
I think low liquidity is a cause almost tautologically, but other things have to happen at the same time as well. Some of these other things can conceivably be caused by technical glitches.
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Lawsuit unfolding after zoom meeting today 3/5/21 with 70+ more customers of millions of dollars stolen on 2.22.21 Mr Meyer has decided to take the case via JAM...filing next week. investorclaims.com/kraken-flash-c