At about 1:30pm today, many altcoins in both cryptocurrency exchanges experienced a sudden and sudden decline, with ACT/USDT exceeding 49% in 30 minutes, Dexe/USDT exceeding 23%, and DF/USDT exceeding 16% in the same period.
The unexpected decline was caused by large sell orders executed within a short time frame, resulting in a significant increase in spot trading volume.
Former FTX community partner Benson Sun analyzed the situation and attributed the price crash to Binance’s recent adjustment to ACT’s leverage position limits. The platform introduced $4.5 million with a maximum open position limit with 1x leverage. Analysts said some market makers had positions above this limit, leading to automatic market price clearance. Mandatory sales have resulted in a fall in contract prices and a huge gap between futures and spot prices, resulting in a fall in spot prices.
Sun also noted that Binance announced this leverage adjustment at 10:32am on April 1, and that it would be implemented at 1:30pm on the same day, with traders being implemented to accommodate within three hours. In particular, Binance made a similar adjustment on March 31, reducing the position limit by an additional 50% on April 1 with a lower leverage level.
*This is not investment advice.
