A Sudden Crash Leaves Traders Stunned! What Happened?
A wave of panic hit Binance earlier today as multiple altcoins saw their prices crash within minutes. While the broader crypto market was holding strong, some tokens suddenly nosedived, with no clear explanation at first.
Among the hardest-hit tokens was ACT (Act 1 The Prophecy), a Solana-based AI memecoin, which plunged over 50% in an instant. Other affected tokens included DeXe (DEXE), dForce (DF), KAVA, HIPPO, BANANAS31, LUMIA, TST, and QUICK, all of which suffered steep double-digit losses.
Did Binance’s Margin Changes Trigger the Crash?
One of the leading theories was that Binance’s recent adjustments to margin trading rules for ACT and five other altcoins may have triggered a massive sell-off. Some traders speculated that these changes forced market makers to liquidate their positions, potentially leading to a domino effect where more tokens were dumped to cover losses.
Additionally, crypto analytics firm Arkham pointed to major market maker Wintermute, which reportedly sold off a large amount of ACT tokens right before the crash. This added to speculation that an automated trading bot might have contributed to the sudden market turbulence.
Binance Responds: 4 Users Dumped ACT Worth Nearly $1M
After hours of uncertainty, Binance finally addressed the situation. According to the exchange, the ACT price collapse was caused by just four accounts dumping nearly $1 million worth of ACT tokens on the spot market. Among them, three were “VIP” traders who sold approximately 514 million USDT worth of ACT, while another trader liquidated 540,000 USDT of ACT after making a deposit.
Binance explained that this massive sell-off triggered forced liquidations in ACT’s futures market, leading to a cascading effect that also impacted other small-cap tokens. However, the exchange is still investigating why these other tokens were hit so hard.
From AI Memecoin Darling to Collapse
ACT was once a star in the AI memecoin hype on Solana, blending viral meme culture with artificial intelligence to create an interactive ecosystem for both humans and bots. At its peak, ACT reached a staggering $890 million market cap, becoming one of the few AI memecoins listed on Binance.
But today’s crash is a brutal reminder of how quickly things can change in crypto. Since its all-time high, ACT’s market cap has dropped by over 85%, now sitting at around $95 million.
Final Thoughts: A Wake-Up Call for Traders
This event highlights the high-risk nature of low-cap altcoins and how sudden moves by large traders can wreak havoc on the market. Whether the crash was a deliberate sell-off, an automated bot failure, or something else entirely, one thing is clear: crypto is never boring.
Stay alert, stay informed, and always manage your risk!
