Interesting price action has been seen in Huobi Token over the past 24 hours in which the digital currency, native to the Huobi Global exchange, experienced a flash crash with a price drop of up to 93%. In what is considered a very rare event, the digital currency rebounded almost at the same rate in a short time.
The Huobi (HT) token traded as low as $0.31 at 21:00 UTC on Huobi, a figure that was also checked in as its lowest score in over a year. The coin is now changing hands at a spot price of $4.31 at the peak of a 15.84% price drop.
It is not uncommon for digital currencies to lose their valuation by more than 50%, however, the last time such a situation occurred, the token, Terra (LUNA) was unable to achieve the same recovery since May of last year to date. Many analysts are still trying to figure out what happened with the HT token and what exactly triggered the massive flash crash.
When such massive flash crashes occur, technically, liquidations are inevitable. According According to data from Coinglass, Huobi recorded a total liquidation worth more than $51 million in the past 24 hours, a trend that is seen as both a consequence of the HT flash crash and the crisis. bearishness of the industry.
In a bid to help improve the situation, Justin Sun, the founder of the Huobi-affiliated Tron blockchain, has pledged to inject $100 million to help improve the exchange’s liquidity pool.
“We deeply apologize for the impact of the leveraged liquidation on the market caused by a few users, and in order to further improve the multi-currency liquidity of the @HuobiGlobal platform, we will set up a liquidity fund with a US$100 million investment,” he said in a tweet, adding that the trading platform “will continue to improve the liquidity depth of major cryptocurrencies and HT tokens, strengthen leverage risk warnings and liquidity capabilities Regarding this incident, we will update the community on follow-up progress.
We deeply apologize for the impact of leveraged liquidation on the market caused by a few users, and in order to further improve the multi-currency liquidity of the @HuobiGlobal platform, we will set up a liquidity fund with an investment of 100 million US dollars.
— HE Justin Sun 孙宇晨 (@justinsuntron) March 10, 2023
Huobi Crash and the effect of the sun
While some industry observers and stakeholders have showered praise on Justin Sun for his response and efforts to strengthen the exchange, new data of Arkham Intelligence could change people’s perspectives.
The data analytics and intelligence firm said the crypto veteran has been shuffling stablecoins in the past two hours as massive funds were withdrawn from Huobi Exchange.
“Justin Sun has been bumping up some stable positions over the past 24 hours. He initially withdrew $60m in USDT, USDC, and USDD from @HuobiGlobal, making deposits into @AaveAave. 12 hours later he re-deposited $100m USDC to Huobi,” the update reads.
It is unclear whether Sun’s withdrawals and deposits are fast in the HT crash, however, trades show that huge fund movements can offset the balance of a relatively stable platform.
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Benjamin Godfrey is a blockchain enthusiast and journalist who loves to write about real-world applications of blockchain technology and innovations to drive mainstream acceptance and global uptake of emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain-based media and sites. Benjamin Godfrey is a sports and agriculture enthusiast.
