At 18:30 UTC on April 1, 2025, the prices of several altcoins on Binance suddenly and dramatically changed. The prices of ACT/USDT, DEXE/USDT, and DF/USDT all dropped—ACT by over 49%, DEXE by over 23%, and DF by over 16% during the same time frame.
This was not a common price change. (For context, the price of Bitcoin, whose price changes seem to affect the price changes of many altcoins, dropped by about 7% and then stabilized at that level.) What caused such a sudden and large change in prices across these three altcoins? Why did these three altcoins seem to drop together?
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
These rapid drops took many traders by surprise and triggered worries about market stability and the part played by large traders, or “whales,” in creating these sudden shifts. While volatility is a familiar feature of the cryptocurrency market, the amount of scrutiny these recent price changes have attracted is unusual. Critics are pointing fingers and trying to figure out if this is just a case of risk management going wrong or if it’s something more sinister.
Contents
The Trigger: Large Sell Orders and Increased Leverage Risk
A dramatic drop in price was immediately caused by a large number of sell orders that came in all at once and overwhelmed the market. On Binance, the price of $ACT, one of the tokens that got hit the hardest, was just about to fall when the exchange adjusted its margin and leverage tiers to give traders more room to use those tools. These weren’t traders who were just using margin to double-down on their long positions, either. When they were using these tools, they were mostly using them to short the market.
One of the most important happenings that worked to bring about the crash was the liquidation of a position held by a whale, which was valued at $3.79 million. This position was liquidated at a price of $0.1877, and the event sent shockwaves through the market, which was already struggling from a lack of sufficient buy support due to the volume of sell orders. The whale’s liquidation drove the price of $ACT down by over 50% from its recent highs, compounding the price decline that was already in motion.
Binance updated leverage & margin tiers on tokens like $ACT — and a whale got liquidated for $3.79M at $0.1877.
Since then, the price of $ACT has plunged more than 50%.https://t.co/MT0EgNW8ib pic.twitter.com/CRuTR9bwSh
— Lookonchain (@lookonchain) April 1, 2025
The liquidation of whales and the intensifying sell orders caused $ACT to drop like a rock from a price point that had been much higher just prior. Few traders, in fact, seemed to see the plummet coming or were prepared for it. The immediate price action that sent the token lower was triggered by a fast-paced group of sellers, but those sellers were liquidating from large positions. And in crypto, large position liquidators tend to be market makers in some way.
The Impact on Other Altcoins and the Market as a Whole
At the same time, other altcoins on Binance suffered severe drops. $ACT was not the only one affected. Tokens like DEXE and DF were also hit hard and fell significantly. DEXE dropped over 23%, and DF was down 16%. My guess is that as long as large sell orders are hitting the market, other tokens are also at risk.
accompanied by a surge in spot trading, was something of a counterintuitive reaction to the price declines. Spot trading volume increased as traders reacted to these sudden price moves, either trying to profit from the volatility or protect themselves from further losses. Prices were declining, but a large number of traders had decided to bet against the price declines. This in turn added even more pressure to the prices, causing prices to fall even further.
For a lot of people, the recent steep and sudden drops have led to queries regarding the overall strength of the market, particularly when it comes to the smaller altcoins that are much more likely to be hit hard by a sell-off. While Bitcoin and Ethereum remain more stable, altcoins such as $ACT, $DEXE, and $DF are still primed to take a hit and skyrocket downwards due to their low liquidity and market cap.
The Role of Leverage and Margin Trading in Volatility
The crash also underscores the ongoing dangers tied to leverage and margin trading in the crypto markets. When Binance increased the amount of heretofore-existing token $ACT, traders found themselves underwater and started selling.$ACT and other large-cap tokens suffered drastic price declines. As I said before, leverage is great for growing profits, but liquidations and forced selling writ large in a down market obviously also have the opposite effect. Buying a large amount of token when its price is already depressed magnifies the losses you will take if its price keeps falling.
Using leverage in turbulent markets can be dangerous. It enables traders to ramp up their winning trades, but it also amplifies losses in the losing trades. Leveraged trading in the speculative crypto market resembles playing a seesaw on a windy day. One minute, you’re soaring high, feeling on top of the world; the next, you’re plummeting down, contemplating just how low you might go before hitting rock bottom.
Those traders who found themselves in the wake of the $ACT crash and other altcoin downturns probably took some big financial punches, particularly if they had leveraged their positions. This is a sobering reminder of the need for risk management and the necessity of being very careful when trading in these super volatile markets.
Binance’s recent troubles shed light on the hazards associated with trading in the crypto marketplace, especially when it comes to using leverage. In offering a window into the not-so-distant future, these events suggest that leveraged trading on crypto exchanges can be just as dangerous as, say, buying stocks on margin—only with many more potential outcomes because of the way these underlying “currencies” and their market tend to behave.
For individuals attempting to traverse the present market landscape, it is vital to proceed with caution and to contemplate the adoption of risk management techniques such as stop-loss orders and portfolio diversification. Furthermore, traders should remain cognizant of any modifications to leverage and margin tiers on exchanges, as these AMOUNT adjustments can exert a pronounced effect on market dynamics and price volatility.
The overall market is dramatically affected by the price movement of tokens such as $ACT. This is a reminder that trading altcoins carries risks, especially when the market is highly volatile. For the astute trader, this may be seen as an opportunity; for the rest of us, it just looks like wild price swings. The price of smaller-cap assets can be fragile, and we’re not sure if that’s a good thing, a bad thing—or if it has just been an unfortunate thing—for us, the retail investors.
To sum up, the steep drops seen in altcoins such as $ACT, DEXE, and DF on Binance show how unstable crypto markets can be and the kinds of dangers traders face when dealing in high-leverage assets. They highlight the importance of staying watchful in the kinds of trades that make the market seem as if it’s rumbling.
They also illustrate how essential it is to maintain a disciplined approach when trading in an asset class that’s changing all the time. Altcoins, in particular, are like a discipline test. They are so easily manipulated; they rise and fall with such drama that they seem like temptations to trade in a way that’s not at all tempted for most traders, who should regard temptation as a risk factor.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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