Altcoins Crash Over 90% on Binance in Sudden Liquidation
Altcoins plunged over 90% on Binance as rumored liquidations shook the market. Arthur Hayes weighs in on the flash crash.
- Altcoins on Binance saw flash crashes of up to 90%.
- Rumors suggest auto-liquidation of cross-margin positions.
- Arthur Hayes says such lows may not return soon.
In the early hours today, the crypto market witnessed a dramatic event as many altcoins on Binance experienced flash crashes, with some dropping more than 90% in minutes. Among the hardest hit was IOTX, which briefly fell to $0, shocking traders and triggering widespread concern.
The crash wasn’t limited to one or two tokens—numerous altcoins were affected, showing steep and rapid declines before rebounding. The abrupt nature of these drops has sparked debate about what exactly happened.
Rumored Liquidations Behind the Crash
Arthur Hayes, co-founder of crypto exchange BitMEX, offered insight into the situation. He pointed to market rumors suggesting that centralized exchanges (CEXs) may have automatically liquidated collateral tied to cross-margin positions.
In cross-margin trading, users’ entire balance is used to avoid liquidation. However, if the market turns sharply, this mechanism can backfire. According to the rumors, once certain altcoin prices dropped, the automated systems triggered forced liquidations, causing a domino effect of selling pressure and massive price slumps.
This is particularly concerning as these liquidations seem to have happened without warning, raising questions about risk controls on major exchanges.
Will Prices Recover?
Despite the chaos, Hayes offered some reassurance. He stated that many high-quality altcoins are unlikely to revisit these low levels again anytime soon. This suggests that the drops may have been technical anomalies rather than indicators of true market value.
For now, the event is a stark reminder of the risks tied to margin trading and the vulnerability of even top altcoins in volatile conditions. Traders are urged to review their margin settings and risk exposure on centralized platforms.
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