The ACT token, as well as several other altcoins, witnessed sharp slumps on Binance today, with varying speculations around the actual cause.
A dramatic event occurred on Binance at around 10:30 UTC when multiple altcoins, including Act 1: The AI Prophecy (ACT), experienced sharp price declines. Blockchain reported Colin Wu first called attention to the development.
Notably, the price of ACT/USDT plummeted by over 49% within just 30 minutes, while DEXE/USDT dropped more than 23%, and DF/USDT fell by over 16%. Several other tokens, including KAVA, HIPPO, LUMIA, TST, and BANANAS31, also suffered significant losses.
At press time, ACT still trades around $0.1, down 49% in 24 hours. Notably, these sudden crashes were primarily due to large sell orders executed in rapid succession, which triggered a surge in spot trading volume.
Speculation on the Cause of the Crash
Beniduboss, a well-known crypto trader, asserted that a bot linked to Wintermute, a major market-making firm, may have been responsible for the abrupt sell-off.
He suggested that a Wintermute bot might have malfunctioned or suffered a liquidation, causing the market crash. The analyst noted that it would be difficult for the Wintermute team to present the issue in a way that would not harm the firm’s reputation.
However, Wintermute’s CEO, Evgeny Gaevoy, dismissed this claim, clarifying that the bot in question was not from Wintermute.
Not us fwiw, but also curious about that post mortem😅
— wishfulcynic (@EvgenyGaevoy) April 1, 2025
Interestingly, an a16zdao partner also alleged that Wintermute was responsible for the collapse of ACT but suggested that a different whale was behind the dumps of other tokens.
Analysts Highlight Possible Triggers
Meanwhile, Vladislav, a crypto analyst, observed that Wintermute had been offloading assets from wallets where they previously acted as market makers. He suggested that either the firm had suffered a hack or something else was wrong.
Further analysis from Lookonchain, a blockchain surveillance resource, confirmed that Binance had recently adjusted the leverage and margin tiers for specific tokens, including ACT.
Binance updated leverage & margin tiers on tokens like $ACT — and a whale got liquidated for $3.79M at $0.1877.
Since then, the price of $ACT has plunged more than 50%.https://t.co/MT0EgNW8ib pic.twitter.com/CRuTR9bwSh
— Lookonchain (@lookonchain) April 1, 2025
This led to a massive liquidation of a whale’s position, amounting to $3.79 million at a price of $0.1877. Following this event, ACT’s price continued to plunge by more than 50%, signaling a cascading effect in the market.
Further, Wu called attention to disclosures from Benson Sun, a former FTX community partner, which corroborated Lookonchain’s analysis. According to Sun, the primary catalyst behind the crash was Binance’s decision to revise the leverage position limits on ACT.
Benson Sun, former FTX community partner, analyzed that the reason was that Binance adjusted the leverage position limit of ACT. A leverage of one times can only open a maximum position of 4.5 million US dollars. Some market makers’ positions exceeded the limit and were directly…
— Wu Blockchain (@WuBlockchain) April 1, 2025
The new rules imposed a restriction where traders using 1x leverage could only open positions up to $4.5 million. As a result, several market makers who had exceeded this threshold saw their positions forcibly closed at market prices.
Notably, this abrupt liquidation led to a sharp contract price drop, which in turn created a significant disparity between the contract price and the spot price, ultimately triggering a sell-off.
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