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Changpeng “CZ” Zhao countered after a screenshot showing Bitcoin at around $24,111 on Binance
Did Bitcoin Really Crash to $24,000?
The sharp wick gave the impression to be isolated from BTC/USD1, a market quoted in USD1, a stablecoin launched by Trump family-backed World Liberty Financial. Within seconds, the pair returned to current Bitcoin prices above $87,000, in accordance with exchange data cited by traders who shared the screenshot.
CZ's explanation was easy: in an illiquid order book, a single aggressive order can trigger an extreme price before the gap is closed through arbitrage. “This actually shows that the exchange is NOT involved in trades. Low liquidity on latest pairs implies that a big market order can push prices higher, but arbitrageurs quickly corrected this. No liquidations occurred as this pair isn’t included in any index.”
The Binance founder reported from Catherine Chan, head of business development at Solv Protocol, that the move was a “liquidity event” and never a Bitcoin collapse. She linked the disruption to a Binance and USD1 promotion that offered a 20 percent APY fixed deposit contract, which she claimed pushed users to exchange USDT for USD1 and briefly made USD1 a premium.
“Many users exchanged USDT → USD1, increasing the USD1 premium to 0.39%: huge for a stablecoin. Smart money borrowed $1 on @lista_dao against the smart lending markets SolvBTC or SolvBTC-BTCB (~0.5% APR). They either deposited $1 directly or sold it slowly locally to fulfill demand. Then someone thought: 'Why not only sell through BTC/USD1?'” They used a market order. Problem: BTC/USD1 has very low liquidity. This market order worn out many of the buy orders, leading to a really low price for a short while,” Catherine explained.
“Arbitrage bots immediately bought it back,” she wrote. “No fundamental changes. No mass liquidations.”
The episode also picked up on a well-recognized touch of crypto paranoia. One user, Bera (@doomsdart), put it as a coordinated signal: “Cz and the Trump family are telling us what they're going to do with our coins. Get ready.” CZ's response, alternatively, suggested the other – that the speed of arbitrage and the dearth of cascading liquidations is evidence that the trading venue didn’t “print” a market-wide price in any respect.
For traders, the insight is less dramatic than suggested within the screenshot, but still relevant: latest quote-asset pairs might be structurally fragile, and promotions that quickly concentrate flow on a single stablecoin can leave unusually thin order books. In such a market, a single market order can grab headlines before starting a trend.
At press time, Bitcoin was trading at $89,298.
Bitcoin Stuck Between 0.618 and 0.786 Fib, 1-Week Chart | Source: BTCUSDT on TradingView.com
Featured image created with DALL.E, chart from TradingView.com
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