Multiple altcoins suddenly crash on Binance, ACT loses 50% in minutes
Quick Take
- Several tokens notched double-digit drops on Binance within minutes.
- The reasons behind the sudden decline were initially unclear, leaving observers guessing about the cause.
- Binance confirmed that four users sold nearly $1 million in ACT coins, heaping selling pressure on the AI meme token.
A basket of altcoins crashed on Binance earlier today, despite an uptick in the broader cryptocurrency market. Data showed tokens like Solana memecoin Act 1 The Prophecy (ACT), decentralized finance social trading platform DeXe (DEXE) and on-chain DeFi liquidity network dForce (DF) declined between 20% and 50% within minutes.
Other tokens — like KAVA, HIPPO, BANANAS31, LUMIA, TST and QUICK — also fell significantly.
ACT’s crash may be correlated to changes on Binance’s leverage-trading platform. The centralized crypto exchange announced margin adjustments to perpetual contracts for ACT and five other altcoins. However, the other tokens listed in the updates did not exhibit similarly sharp price declines — leaving observers speculating on the cause.
Some users on social media guessed that the new ACT perp contract's margin on Binance triggered an unexpected squeeze on a market maker’s positions. The market maker’s automated trading bot might have liquidated other tokens to hedge losses, if that were the case. Additionally, The OnchainData Nerd, citing Arkham data, said market maker Wintermute sold off a massive amount of ACT tokens on April 1.
Binance attributed the price crash to spot market sales from four accounts, per a statement released hours later. The exchange noted that three "VIP users" sold an estimated 514 million USDT worth of ACT tokens and a "non-VIP user" liquidated about 540,000 USDT of ACT after a deposit. "The ACT price drops resulted in the liquidation of some users' futures positions and led to declines in other low market cap tokens as well. We are currently conducting further investigation on reasons for the other token declines," according to the platform's preliminary investigation.
ACT was a major player in last year’s AI memecoin craze on Solana, merging the viral memecoin mania with artificial intelligence-driven hype for an ecosystem that allowed humans and bots to interact. The token climbed to over $890 million in market capitalization at its peak and was one of the few AI memecoins listed by Binance. ACT’s market cap has crashed over 85% since its zenith and floated around $95 million as of writing, per The Block's price data.
Editor’s note: The article was updated with excerpts from a Binance statement.
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