The reason for the flash crash of $ACT tonight has been found: this is also one of the phenomena following the meme coin carnival.
1. Binance rule adjustments trigger forced liquidation
Binance suddenly adjusted trading rules, giving market participants only three hours to adapt, resulting in market makers and investors being forced to liquidate, triggering a chain reaction of liquidations and panic selling. Crypto KOL 0xWizard revealed that their ACT position, which had originally been over $10 million in profit, was stopped out, ultimately resulting in only $1 million in profit.
2. Large-scale sell-off by major funds
Data shows that ACT had about $100 million in concentrated holdings on Binance, of which $73 million was sold off in just 15 minutes, indicating that major funds may be offloading at high prices. In contrast, the holdings of this token on other exchanges (such as Bybit) were only $8 million, showing that its liquidity is highly concentrated on Binance, exacerbating price volatility.
3. Long-term concerns about token structure
ACT has previously been controversial due to infighting within the founding team and the founder's alleged 'exit,' although the community has attempted to shift towards decentralized governance, its long-term sustainability remains in question. This crash may further amplify market distrust towards this token.
4. High speculative nature of meme coins
As a meme coin, ACT's price is highly dependent on market sentiment and short-term speculation, rather than fundamental support. Such tokens usually experience extreme volatility and can easily crash due to a reversal in market sentiment or actions by large holders.
In summary, ACT's flash crash is the result of a combination of Binance rule adjustments, major sell-offs, and the vulnerability of market structure, reflecting the typical risk characteristics of high-risk meme coins.