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The BTC/USD1 trading pair on Binance saw a quick and urgent collapse. Bitcoin fell to $24,000 before quickly recovering.
The incident did not affect Bitcoin prices on major pairs such as BTC/USDT. However, he highlighted the liquidity risks in the newly launched trading pairs.
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BTC/USD1 Collapse to $24,000 Reveals Risks of Diminished Liquidity
According to Binance market data, the incident only lasted for a few seconds. The price of BTC/USD1 later settled above $87,000.
USD1 is a new stablecoin issued by World Liberty Financial. The project has the support of the family of the American president Donald Trump.
Binance charts show a strong wick. This step did not cause liquidation damage.
The accident happened during the Christmas holiday period. Trading volumes fell sharply at that time. forecast Some observers believe that this move was a test of liquidity for the BTC/USD1 pair.
João Widson, founder of Alfractal, explained that this phenomenon appears more frequently in the forward and backward markets. Capital inflows tend to be weak during these phases.
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“Low liquidity in some trading pairs in many exchanges causes strong fluctuations. This leads to temporary price changes and arbitrage problems for a few minutes. This is more common than it seems when the market is in a bearish phase.” explain Joao Woodson.
Another more detailed explanation from the investor community related the incident Binance Promotional Campaign for USD one. Binance recently launched an annual fee offer of 20% up to $50,000 per user.
reported WuBlockchain, a trusted market monitoring account, reported a sharp increase in supply of $1 USD after launch. The supply increased by more than 45.6 million tokens in a few hours. The total market capitalization was over $2.79 billion.
The sudden influx of capital at USD1 pushed the price of the stablecoin higher by 0.2%.
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description Bank account X that many of investors tried arbitration. I borrowed a dollar and sold it gradually on the spot market to the participants who joined the offer.
Meanwhile, some traders chose to sell through the BTC/USD1 pair. Weak liquidity caught them by surprise. Prices have collapsed sharply, causing the above result.
“This is just a small fluctuation in a bear market. Don’t worry about it. will appear Many similar fluctuations later,” said Investor Bank.
Could a similar situation happen with BTC/USDT?
A broader question now attracts attention. Could a similar event happen in BTC/USDT? This pair has the highest liquidity in the market. A sudden drop will cause us huge liquidation losses.
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Analyst Marton cited Caico’s data. He noted that the market depth of 1% of Bitcoin has increased significantly over the years.
“The depth is not only recovered. It is extended. From the height of October 2025, the depth of 1% of Binance exceeded $ 600 million. This level exceeds the pre-2022 crash levels.” He said Martin
as well as confirm The decrease in BTC/USDT prices did not affect liquidity. Over 100 days, BTC/USDT fell by 21.77% (from $110,291 to $86,089). During this period, the average daily revenue volume reached $19.8 billion, bringing the total to $613.5 billion.
With greater market depth and a large trading volume, a similar event on BTC/USDT remains unlikely.
However, the incident is a lesson for traders. Carefully choosing trading pairs is essential. Low liquidity pairs can cause extreme slippage and unexpected losses.
