Significant Price Drops in ACT and Several Other Tokens Linked to Adjustments in Binance Contract Rules

According to the analysis by BlockCred co-founder @CnmdRain, the main reason for the sharp decline of several tokens, including ACT, this evening is not due to the sell-off by trading institutions, but rather a chain reaction triggered by Binance’s adjustment of contract position limits and leverage ratios.

Binance announced this afternoon that it will update the leverage and margin tiers for the perpetual contracts of 1000SATSUSDT, ACTUSDT, PNUTUSDT, NEOUSDT, NEOUSDC, TURBOUSDT, and MEWUSDT at 6:30 PM tonight, which will affect users’ positions. @CnmdRain indicated that despite Binance’s advance notice, market makers’ long positions were still actively liquidated due to high leverage restrictions, causing contract prices to drop. The arbitrage bots amplified the price differences, resulting in a significant increase in selling pressure in the spot market, ultimately leading to a double whammy for both the spot and contract markets, alongside market panic.

Data shows that after 6:30 PM, ACT plummeted from approximately $0.189 to $0.084, a decline of over 50%. According to information monitored by on-chain data analysis platform Lookonchain, after Binance updated the contract leverage and margin tiers for the aforementioned tokens, a certain whale was liquidated at a price of $0.1877, incurring a loss of $3.79 million.