Bitcoin experienced a sudden drop to $24,111 on Binance”s BTC/USD1 trading pair late Tuesday, only to rebound quickly above $87,000, according to data from the exchange. This dramatic price movement was isolated to the USD1 stablecoin, which is associated with World Liberty Financial, a company backed by the Trump family.
The abrupt volatility did not reflect broader market conditions, as it was not observed in other significant BTC trading pairs. Such sharp price “wicks” often stem from low liquidity or potential display issues, rather than a systemic market collapse. Particularly, newer or less-traded stablecoins like USD1 tend to have fewer market makers providing competitive quotes, leading to a shallow order book.
In these scenarios, a significant market sell, liquidation event, or an automated trade can swiftly deplete buy orders, resulting in prices printing far below actual market values until demand re-emerges. Additional causes for these dislocations can include temporary pricing anomalies linked to spread widening, incorrect quotes from market makers, or trading bots reacting to unusual price movements.
During less active trading hours, these effects can become exaggerated due to the reduced number of participants available to absorb the order flow and restore price equilibrium. While such price wicks may appear alarming on trading charts, seasoned traders typically regard them as microstructure events, rather than indicators of Bitcoin“s overall market trajectory.
This incident underscores the inherent risks associated with executing trades on thin liquidity pairs, especially those involving stablecoins or trading routes that are still in the process of building adequate liquidity.
