Recently, the price of the cryptocurrency #Act I: The AI Prophecy (ACT) has dropped sharply, raising concerns in the investor community. Below are some key factors believed to have impacted this decline.
1. Adjustment of leverage position limits on Binance:
On April 1, 2025, Binance announced an adjustment to the leverage position limits for $ACT futures contracts. Specifically, the maximum limit for opening positions has been reduced to $4.5 million with a 1x leverage ratio. This change took effect in less than 3 hours after the announcement, leaving many investors and market makers unable to adjust their positions in time. As a result, positions exceeding the new limit were liquidated at market prices, leading to a sharp decline in the value of ACT.
2. Large sell-offs from investors:
According to reports from Binance, three VIP users sold a total of approximately $514,000 worth of ACT tokens on the spot market in a short period. Additionally, another user transferred a large amount of ACT from another platform and sold about $540,000 worth of tokens on the spot market shortly thereafter. These large transactions created strong selling pressure, contributing to the sudden drop in the price of ACT.
3. Impact from trading bots and arbitrage:
The decline in the price of ACT futures has created a price discrepancy between the futures market and the spot market. Arbitrage bots have taken advantage of this discrepancy, executing rapid buy and sell transactions to make profits. However, this activity has amplified price volatility and led to strong selling pressure in the spot market, contributing to the price drop of ACT.
4. Panic psychology and profit-taking by investors:
The sudden price drop triggered panic psychology in the investor community. Many decided to take profits or cut losses, leading to a wave of sell-offs in both the spot and futures markets. This further increased selling pressure and pulled the price of ACT lower.
