A number of altcoins and memecoins saw a sharp crash today, with some tokens losing more than 50% of their value in minutes.
One of the largest dips was from The AI Prophecy (ACT), which plummeted 58% from 0.19 to 0.08 dollars within about one hour, wiping away almost $96 million market value according to CoinMarketCap.
The other affected tokens are DeXe (DEXE), dForce (DF), sudeng (HIPPO), CZ’s Dog (BROCCOLI), and Kishu Inu (KISHU).
But the overall market has not reacted to this and has held steady. Bitcoin, for instance, has not dropped in price because of it.
The team behind Act I The AI Prophecy acknowledged the crash and alerted investors that they were looking into it.
“Our team is actively investigating and working collaboratively with all relevant parties to address this matter,” they tweeted on X (formerly Twitter). They also said that they were working on a response plan with trusted partners to resolve the problem.
Meanwhile, some traders think the recent Binance margin update was the cause. The exchange recently updated its leverage and margin settings for some tokens, including ACT, at 10:30 UTC on April 1, as confirmed by blockchain analytics platform Lookonchain.
This upgrade reportedly prompted a massive liquidation of a whale position that amounted to $3.79 million. “Binance altered leverage and margin tiers on tokens such as ACT — and a whale was liquidated for $3.79 million at $0.1877,” Lookonchain reported.
Also, speculation grew that Wintermute, a global algorithmic trading firm, might have caused the sell-off. Some believed the firm liquidated a number of altcoin positions, while others speculated there was a hack or insolvency.
“MMs don’t just nuke their own books for fun. Either it’s a hack, insolvency, or someone is getting margin called hard,” crypto commentator DEFI Kadic wrote. However, Wintermute’s CEO Evgeny Gaevoy denied any involvement, responding on X with, “Not us [for what it’s worth], but also curious about that post-mortem.”
The mayhem continued as other tokens such as HIPPO, BANANA31, TST, and LUMIA also fell soon after 11:00 UTC. Some recovered quickly, while others struggled to regain their losses. There was a huge spike in selling volume at the same moment, indicating that numerous traders or automated bots were offloading large quantities.
Certain traders thought that a misconfigured trading bot may have triggered the cascade of liquidations. Others pointed to Binance’s announcement that leverage changes would apply to existing positions, possibly forcing traders to adjust their strategies.
The market turmoil spread across other centralized and decentralized exchanges, with affected tokens showing similar price drops across platforms. Some traders rushed to buy the dip, while others exited positions to avoid further losses.
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