- Tokens like ACT, DEXE, and DF saw sharp declines, dropping up to 50%.
- Binance’s leverage changes likely led to the volatility and sell-off.
- The price drops spread to other exchanges, signaling broader market impact.
Several digital assets saw price dips on Binance on Tuesday, with some tokens slipping by as much as 50% within just 30 minutes. These steep declines caught the attention of market participants, who are speculating that a trading bot malfunction could have caused the disruption.
Sudden Price Movements on Binance
According to a recent post by Wu Blockchain, it is reported that at around 11:00 UTC, the tokens Act I, the Prophecy (ACT), DeXe (DEXE), and dForce (DF) experienced sharp declines. ACT dropped by 50%, while DEXE fell by 30%, and DF saw a nearly 20% loss within a short period. These abrupt changes occurred without any clear announcement or catalyst, leading many to wonder what triggered the sell-off.
Other tokens, including HIPPO, BANANA31, TST, and LUMIA, also saw noticeable declines shortly after 11:00 UTC, though their drops were not as severe as ACT’s. Some tokens, like KAVA, briefly saw price dips before being quickly bought up by traders.
These sudden drops were accompanied by a surge in selling volume, which was not observed in other tokens on Binance at the same time. Binance had announced updates to leverage requirements and margin tiers for perpetual contracts at 10:30 UTC on Tuesday. This included changes to the ACT/USDT contract.
The announcement stated that the new rules would apply to existing positions. This likely prompted adjustments by traders using automated bots, leading to the price fluctuations observed in perpetual contracts. These adjustments then affected spot prices, creating a cascade effect.
Ripple Effect Across Other Exchanges
The impact of these rapid price movements was not limited to Binance. Similar descents were seen on other centralized and decentralized exchanges. These tokens experienced similar losses across multiple platforms, signaling that the issue was not isolated to Binance alone.
Market participants quickly turned to social media to speculate on the cause of the unusual market behavior. Some suggested that a misconfigured trading bot may have caused the sharp sell-off. However, there has been no confirmation of this theory. Andrei Grachev, founder at DWF Labs on X commented that:
“Seems someone has been hacked or banned or idk,”
Others suggested that the updates to contracts might have forced bots to adjust their positions, triggering the volatility. This sudden price action has raised questions about the role of automated trading systems and their potential impact on market stability.
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