- Bitcoin saw major gains recently, rising over 8% and surpassing $61,500 which boosted market optimism
- Bitcoin’s price increase was aided by over $90 million in short liquidations, forcing short sellers to buy back the asset
- The price action caused a spike in traffic to Coinbase, crashing the exchange and preventing users from accessing accounts during the volatility
On February 28th, 2024, the popular cryptocurrency exchange Coinbase suffered an outage soon after Bitcoin saw a significant price increase. This article explores what happened during Coinbase’s crash and the events leading up to it.
The Bitcoin Price Pump
Over the last three days, Bitcoin has seen impressive gains, rising over 8% in just the past 24 hours. This latest surge brought Bitcoin above the $61,500 level as optimism grows for the cryptocurrency market in 2024.
Short Liquidations Add Momentum
Bitcoin’s ascent was aided by over $90 million in short liquidations over the previous day. When short sellers are liquidated, they are forced to buy back the asset to cover their positions. This additional buying pressure helped propel Bitcoin upwards.
Coinbase Goes Down
With Bitcoin pumping to new local highs, Coinbase suddenly crashed. The downtime prevented users from accessing their accounts during the price volatility. Coinbase acknowledged they were investigating the problem but did not initially provide any specifics.
Large Traffic Surge Overwhelms Exchange
Coinbase CEO Brian Armstrong tweeted that the exchange was experiencing a large spike in traffic, likely due to the Bitcoin price action. While asset balances remained secure, the influx of users proved too much for Coinbase’s infrastructure.
Ongoing Issue With No ETA
Hours later, Coinbase had still not resolved the outage. With no estimated time for the fix, users were left unable to trade during the market volatility. Coinbase said they would provide updates when the cause was determined and functionality restored.
The Coinbase crash underscores the risks of relying on centralized exchanges during periods of peak trading activity. As cryptocurrencies see increased adoption, it will be critical for these platforms to scale accordingly to meet user demand.
