Flash Crash of AI Concept Stocks Linked to Binance Sell-Off

The CEO of Tread.fi, DYJ, has analyzed a recent flash crash involving perpetual contracts for AI concept stocks in the U.S. stock market, attributing the initial sell-off to activity on the Binance trading platform. The incident began when a trader liquidated approximately $2 million worth of long positions in SanDisk, which led to a rapid decline across other markets due to the thin depth of the order book.

According to DYJ, significant selling pressure first emerged on SanDisk (SNDK) at Binance, with a transaction of about $407,000 occurring within the first second, followed by another $1,030,000 in the subsequent second. This selling trend extended to Micron Technology (MU) almost immediately, prompting a series of sweeping orders on the Hyperliquid platform, where around ten addresses submitted immediate-or-cancel (IOC) sell orders concentrated on SNDK, SOXL, DRAM, SKHX, SKHY, and MU within a span of 1.8 seconds.

During the initial minute of concentrated selling, Binance recorded transaction amounts of approximately $21.9 million for SNDK and $5.1 million for MU. In contrast, Trade.xyz saw much lower transaction volumes of about $3.1 million for SNDK and $300,000 for MU. The selling pressure on MU on Hyperliquid escalated further, reaching $10.8 million and $9.5 million within the following two minutes, which DYJ attributed to a chain of liquidations triggered by the initial sell-off.

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Source: KLEA News