Analysis: Market Makers Bought SHIB on DEXs to Prevent Price Crash After WazirX Hack

IconCryptoNewsTerminal Staff18 Jul, 2024

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Analysis: Market Makers Bought SHIB on DEXs to Prevent Price Crash After WazirX Hack

Market Makers Stepped In After WazirX Hack On-chain data analytics firm Lookonchain analyzed that market makers like Wintermute purchased SHIB on decentralized exchanges (DEXs) after the WazirX hack involving the sale of $92 million worth of ETH. These market makers subsequently deposited the acquired SHIB on centralized exchanges, preventing a severe price drop. Market Maker Intervention Market makers play a crucial role in stabilizing cryptocurrency prices by providing liquidity and ensuring orderly trading. In the case of SHIB, their timely intervention prevented a significant sell-off and cushioned the price drop. By purchasing SHIB on DEXs and depositing it on exchanges, market makers increased the supply on exchanges and reduced the price impact of the hack-related ETH sale. Overall Impact The actions of market makers helped mitigate the potential negative impact of the WazirX hack on the SHIB price. This highlights the importance of market makers in maintaining price stability and preventing extreme price fluctuations in the cryptocurrency market.

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