A recent update by Binance has sent shockwaves across the cryptocurrency market, leading to massive liquidations and sharp corrections for several altcoins. Solana-based memecoin ACT bore the brunt of the downturn, experiencing a dramatic 50% drop in just 30 minutes. Initially, speculation pointed to market maker Wintermute as the culprit, but a closer look suggests Binance’s leverage and margin tier adjustments played a key role.
Around 18:30, multiple altcoins on Binance experienced sharp declines. ACT/USDT dropped over 49% within 30 minutes, DEXE/USDT fell more than 23%, and DF/USDT declined over 16% in the same period. The sudden dips were triggered by large sell orders executed in a short time frame,… pic.twitter.com/tdmPKMfR3l
— Wu Blockchain (@WuBlockchain) April 1, 2025
Altcoins Suffer Steep Declines Amid Binance Adjustments
According to an X post, multiple altcoins listed on Binance suffered double-digit losses following the exchange’s margin and leverage update. Alongside ACT’s nosedive, DEXE and DF recorded declines of 23% and 16%, respectively, in the same timeframe. The sudden market movements left traders scrambling for answers, with many attributing the selloffs to large, rapid sell orders.
“The sudden dips were triggered by large sell orders executed in a short time frame, leading to a significant surge in spot trading volume,” commented one analyst.
Wintermute, a well-known market maker, was initially suspected of orchestrating the mass selloffs. However, CEO Evgeny Gaevoy refuted these claims, stating that the firm reacted only “post move” rather than being the instigator. The timing of these sell-offs coincides with a broader market recovery, with assets like Compound (COMP) surging 70%.
Binance’s Update: The Real Trigger?
The steep decline in ACT’s price appears to be linked to Binance’s margin and leverage adjustments. In an April 1 announcement, the exchange stated that changes to the margin tiers of select perpetual contracts would impact existing positions. The abrupt modification caught traders off guard, leading to forced liquidations.
One notable liquidation involved an ACT whale, who lost $3.79 million at $0.1877, igniting a cascading selloff. Former FTX community manager Benson Sun criticized Binance’s handling of the update, arguing that traders were given insufficient time to react.
“Before changing the rules, Binance should have evaluated how many positions would be closed,” said Sun. “If there are market makers with large positions, they should have been notified in advance.”
More Controversy Surrounding Binance
Binance continues to face scrutiny, particularly after the listing of MUBARAK, which plummeted 40% within hours. CEO Changpeng Zhao dismissed concerns about the listing’s impact on prices. Meanwhile, Binance has also drawn criticism for excluding Pi Network from its Vote To List initiative, further stirring controversy among crypto enthusiasts.
Also Read: Binance Delists Tether (USDt) to Comply with MiCA in the EEA
With Binance’s latest update rattling traders, market participants remain wary of sudden changes that could impact leveraged positions. The recent ACT crash serves as a stark reminder of the risks associated with margin trading in a volatile crypto market.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m your translator between the financial Old World and the new frontier of crypto. After a career demystifying economics and markets, I enjoy elucidating crypto – from investment risks to earth-shaking potential. Let’s explore!
