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Coinbase repeats a downturn pattern from its site when Bitcoin becomes volatile

June 3, 2020

Coinbase has gone offline four times during the big price movements of Bitcoin (BTC) in the past three months, and disgruntled users who can’t access their wallets are asking for answers.

On June 1, when Bitcoin recovered from $ 9,600 to $ 10,380 in less than an hour, Coinbase users trying to access their wallet received news that the website was “temporarily unavailable”.

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Coinbase repeats a downturn pattern from its site when Bitcoin becomes volatileCoinbase repeats a downturn pattern from its site when Bitcoin becomes volatile

Source: Coinbase

On May 9, two days before the expected halving, Bitcoin’s price dropped nearly $ 2,000 in less than 24 hours, probably due to a massive sale of whales and other investors. On April 29, BTC rose nearly 12% to $ 8,600. In both cases, many Coinbase users were again unable to exchange digital assets.

Frightening This problem was not resolved even after the cryptocurrency bloodbath in mid-March. when some exchange users were unable to sell their Bitcoin during the price drop to $ 3,000.

Coinbase falls when it’s needed the most

Many users of the largest cryptocurrency exchange in the U.S. have reported that they cannot trade Bitcoin at these moments of maximum volatility.

Unfortunately, Large declines or price increases often occur when traders want to buy and sell more. Losses can increase if users cannot access their accounts to sell their cryptocurrencies, and potential profits can simply disappear if they cannot buy anything.

But why?

The Coinbase status page contains updates on current outages, but only mentions “connectivity issues” for June 1, May 9, and April 29 and “network congestion” on March 12.

In the absence of an official statement from CEO Brian Armstrong or other Coinbase representatives, crypto-Twitter members quickly bet that the exchange would crash during crucial trading hours.

Twitter user CryptoWhale published a graphic for its more than 18,000 followers on June 1, shortly after the recent outage, who speculated that Coinbase had a built-in algorithm to automatically shut it down when there was a BTC price move in excess of $ 500:

diagram

Source: CryptoWhale

Dan Gambardello from Crypto Capital Venture he just asked: “How is it that a $ 8 billion exchange drops every time Bitcoin pumps 5%?”

Cryptocurrency exchanges, including large ones like BitMEX, are having trouble accessing users when prices change. However, Coinbase seems to be building a reputation in the cryptocurrency community.. The website itself completely failed in June 2019, causing Bitcoin’s price to drop by $ 1,400.

Cointelegraph contacted Coinbase but received an answer only at the time of printing. We will update this article when we hear from them.