On Tuesday, several tokens saw drastic declines of up to 50% within just 30 minutes on the Binance exchange, sparking speculation that a misconfigured trading bot might be responsible. The tokens affected included Act I, the Prophecy (ACT), which plummeted 50%, DeXe (DEXE), which fell by 30%, and dForce (DF), which dropped nearly 20%. The sudden price drops began shortly after 10:31 UTC, with no immediate explanation or catalyst for the sharp falls, according to Binance data.
The massive sell-off resulted in the liquidation of $6.28 million worth of long positions in ACT-tracked futures across various exchanges. One trader suffered a $3.2 million liquidation as part of the cascade.
Around 18:30 UTC, the declines continued, with ACT/USDT dropping over 49% in just 30 minutes, while DEXE/USDT and DF/USDT also saw significant dips. Large sell orders executed quickly seemed to be the trigger for these steep drops. Other tokens such as HIPPO, BANANA31, TST, and LUMIA also experienced declines around 11:00 UTC, although not as severe as ACT, with some tokens, like KAVA, being quickly bought up by traders.
Although the affected tokens were not related or in the same sector, data showed an uptick in selling volumes at roughly the same time. However, other tokens on Binance did not see similar sell-offs. A key factor that may have contributed to the volatility was Binance’s announcement at 10:30 UTC regarding changes in leverage requirements and margin tiers for perpetual contracts, including ACT/USDT. The new rules applied to existing positions, which likely triggered position adjustments by trading bots, exacerbating price volatility in perpetual contracts. This instability eventually spilled over into spot prices as well.
The volatility spread to other exchanges, with the affected tokens suffering similar declines on centralized and decentralized exchanges alike.
Early reactions on social media ranged from surprise to speculation that a market-making bot might have malfunctioned, causing the sudden crashes. However, CoinDesk could not independently verify the claims. Andrei Grachev, founder of DWF Labs, suggested the drops could be linked to a hack or ban. Others speculated that the changes to perpetual contracts forced traders to unwind positions, leading to a panic that spread across both spot and futures markets.
