After some further investigation, it has been showing that a technical glitch on the Binance exchange could explain the price pump and dump in BTC/USD on Wednesday.
The first move seems to have been legit as the BTC/USD price hit a high of USD 7,775.00 at 13:00 GMT on Wednesday afternoon.
Then as some traders looked to book profits on trades in the Binance stablecoin contract (BTCUSDS) it seems that the price overstretched to the downside to print a low of USD 681.81.
That’s quite a sale! So what happened. Looking at the chart, it took less than 1 minute for the price to sell off and come back to a more natural level. Then on the chart below that one. we have highlighted the normal Coinbase exchange price action and you can see a volume spike also followed. This could be due to some arbitrage trading but there was clearly some kind of data issue. Binance have not made an official statement at this time but we will keep looking out for any communication.
(Above BTCUSDS from Binance, below BTC/USD from Coinbase both 1-minute charts)