ACT has plummeted by around 50% in just half an hour and is currently trading at around $0.10. The dramatic drop has left many wondering what is behind the coin’s sudden move. In about 15 minutes, a large amount of the centralized position of $ACT on Binance was sold off in a significant amount, amounting to tens of millions of dollars. Meanwhile, on Bybit, the Token had only $8 million in positions, indicating a high level of centralization – an issue that has long been a concern for the market. It seems that massive selling by large funds may have been a significant factor.
For its part, Wintermute , a familiar name in the market-making space, has clarified that it was not responsible for the collapse of ACT or other meme coins. It only arbitraged on AMM liquidation pools after the price moved sharply, not actively causing the chaos. For now, Wintermute says it is monitoring the situation to assess further developments.
The main reason for the plunge of ACT and other Meme coins is revealed: Binance's contract rule adjustment triggered a chain reaction.
According to analysis by CnmdRain, co-founder of BlockCred.AI, the recent sharp decline in meme coins such as ACT was not due to Wintermute liquidation, but was caused by the chain reaction caused by Binance adjusting contract position limits and leverage ratios. Market makers were forced to close long positions due to leverage restrictions, resulting in a drop in contract prices. Arbitrage robots amplified the price difference, causing strong selling pressure in the spot market, eventually triggering a wave of sell-offs in both the spot and contract markets, leading to market panic.
This event shows that the crypto market is always volatile and small changes in rules can lead to large unexpected consequences.
