The recent update by Binance regarding leverage and margin levels has led to sudden liquidations and sharp price declines in the crypto market. Notably, the change caused a drop of more than fifty percent in the Solana
$129-based memecoin, ACT.
Evaluating the Impact and Criticism
Following the update, reports indicated that several other cryptocurrencies traded on Binance also experienced double-digit losses. Specifically, DEXE and DF faced declines of approximately 23% and 16% respectively. It is believed that large sell orders played a significant role in these rapid transactions.
Investors began to question the effects of the system’s regulations after suffering losses from these sudden sell-offs. An increase in market volume appears to have amplified the speed and impact of the movement.
Benson Sun: “The number of positions to be closed should have been evaluated before changing the rules.”
Wintermute CEO Evgeny Gaevoy indicated that the market’s reaction occurred after the update, while he did not accept direct responsibility for the outcomes.
Evgeny Gaevoy: “The market’s reaction began after the changes were implemented.”
The update regarding margin levels by Binance is also reported to have affected perpetual contracts. There are concerns about the risk of existing positions being suddenly liquidated. One investor reportedly suffered millions of dollars in losses due to the decline in the ACT token price.
On the other hand, some cryptocurrencies are showing signs of recovery within the current market conditions. Increases in various tokens, such as Compound, have generated expectations for partial improvement in the market. It is emphasized that investors need to reassess their positions in light of sudden price fluctuations.
