The Altcoin Crash: A Spot of Bother?

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The Altcoin Crash: A Spot of Bother? 🤔

The Altcoin Crash: A Spot of Bother?

Good heavens, the drama that’s been unfolding on the cryptocurrency markets! Binance, that esteemed exchange, has been at the center of a spot of bother, with a sudden and drastic price crash hitting multiple tokens.

Investors were left scrambling, like a bunch of headless chickens, as coins like ACT, DEXE, and DF took a tumble. ACT, in particular, dropped like a stone, plummeting from $0.189 to $0.087 in the blink of an eye. And don’t even get me started on the poor souls who were holding on to DEXE and DF!

The event sent shockwaves through the crypto community, with everyone from seasoned traders to amateur enthusiasts speculating about what could have caused such chaos. Was it a bot malfunction? A sign of impending delistings? Or, heaven forbid, an attempt to manipulate the market?

Following the sharp drop of ACT, TST and other tokens on Binance yesterday, MASK, LEVER and other tokens have experienced a short-term and huge drop again today. LEVER/USDT fell by more than 28% and MASK/USDT fell by more than 29% in a short period of time. The decline of ACT and…

— Wu Blockchain (@WuBlockchain) April 2, 2025

The Altcoin Crash: What Happened?

So, what exactly happened? Well, it appears that ACT had been trading within a stable range for most of March, but then, suddenly, it plummeted from $0.189 to $0.087 in just half an hour. Many other tokens followed suit, like a bunch of lemmings jumping off a cliff.

The sudden price drop resulted in many traders pointing fingers at automated trading bots. A particular theory suggested that Wintermute, a prominent market-making firm, might have played a role in the crash. But, of course, Wintermute’s CEO, Evgeny Gaevoy, was quick to deny these allegations, stating, “Not us fwiw,” he said.

Not us fwiw, but also curious about that post mortem😅

— wishfulcynic (@EvgenyGaevoy) April 1, 2025

However, some analysts pointed to Binance’s recent update on leverage and margin tiers for various altcoins, including ACT. These adjustments may have caused traders to rebalance their positions, leading to mass sell-offs and triggering a chain reaction in the market.

Crypto analysts and influencers asked their followers to not use Binance anymore or invest in the altcoins that are being listed on the centralized exchange, claiming that the firm has been manipulating the market. But, as we all know, the truth is often shrouded in mystery, and the crypto community remains skeptical of all the events.

Binance: The reason is that three VIP users cross-sold tokens worth about 514,000 USDT in the spot market in a short period of time, and a non-VIP user transferred a large amount of ACT from other platforms and sold tokens worth 540,000 USDT in the spot market in a short period…

— Wu Blockchain (@WuBlockchain) April 1, 2025

This significant selling pressure within a short time window could have easily triggered the massive price drop.

Bad Press for Wintermute

Wintermute has been at the center of multiple similar incidents in the past. In early 2025, the firm was accused of triggering sharp market volatility when it received over $100 million from Binance between January 27 and 28.

Wintermute was also accused of withdrawing liquidity from several Automated Market Makers (AMMs), causing price crashes exceeding 60% for certain tokens.

While Gaevoy denied accusations of market manipulation, stating that their actions were purely related to arbitrage trading, the crypto community remains skeptical of all the events.

What Wintermute does thread

It’s been exceptionally “fun” on twitter last few days with some accounts hitting new lows in terms of market structure understanding. I’ve written a few times in the past about what we do and how we prefer to do things, but maybe it’s a good time for…

— wishfulcynic (@EvgenyGaevoy) February 3, 2025

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2025-04-02 21:30