On Christmas Day, Bitcoin briefly flashed down to around $24,000–$24,111 on Binance’s BTC/USD1 spot trading pair.
This was a classic flash crash caused by extremely thin liquidity in that specific pair during holiday trading hours. USD1 is a relatively new stablecoin issued by World Liberty Financial backed by the Trump family, with much lower trading volume and order book depth compared to major pairs like BTC/USDT.
A large sell order or cascade of orders swept through the thin buy-side liquidity, causing a sharp downward wick on the chart. The price recovered almost instantly within seconds as arbitrage bots bought the dip and normalized it back to the global market price ~$87,000–$88,000.
This event was isolated to the BTC/USD1 pair and did not affect broader Bitcoin markets or major pairs e.g., BTC/USDT on Binance or other exchanges remained stable above $86,000. CoinDesk confirm It was due to low holiday volumes and order book mechanics.
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No significant liquidations were triggered from this wick, as it didn’t impact leveraged futures pricing broadly. Similar incidents have occurred before on illiquid pairs.
Recent daily liquidations have been in the hundreds of millions at most, not billions from this flash wick, with no ongoing exploit or massive liquidation cascade. Flash crashes on illiquid pairs highlight risks in newer/low-volume markets, but this was not an exploit or systemic issue affecting BTC overall.
The flash wick to ~$24,000 was confined to Binance’s low-volume BTC/USD1 spot pair. Major pairs (e.g., BTC/USDT) remained stable above $86,000–$88,000. No significant liquidations occurred—unlike larger 2025 events (e.g., October’s $16–19B cascade).
CoinGlass data shows typical daily liquidations in the hundreds of millions, not billions tied to this. Arbitrage bots normalized the price in seconds. As of December 27, 2025, Bitcoin trades steadily around $87,400–$87,600, with no lingering sell-off.
Holiday Amplification: Thin liquidity during Christmas low trading volumes exaggerated the wick from a single large sell order or cascade. Newer/illiquid pairs like BTC/USD1 are prone to extreme volatility. A Binance 20% APY promo on USD1 deposits surged demand, draining order book depth and creating a premium—then a market sell order swept bids.
Stick to high-volume pairs (USDT/USDC) for execution. Use limit orders over market orders in thin markets to avoid slippage. Similar wicks happened before (e.g., December 10, 2025, on the same pair). Binance (via CZ) noted no involvement in trades and no index-linked liquidations.
Events like this may prompt better price protection mechanisms or warnings for new pairs to reduce “fat finger” errors and FUD. USD1 hit $3B+ market cap shortly after, showing strong adoption. Promotions and integrations like replacing BUSD collateral drive inflows, but expose growing pains in liquidity.
Ties to the Trump ecosystem amplify visibility—and conspiracy claims e.g., manipulation theories on X/Reddit. Most evidence points to organic liquidity issues, not coordinated dumps. Could fuel regulatory debates on stablecoin oversight.
Its reinforces need for deeper order books in emerging assets. As stablecoin market caps swell ($310B+ total), similar events may recur until infrastructure matures. Positive spin: Quick arb recovery shows market efficiency.
Overall, this was a non-event for Bitcoin’s fundamentals—more a reminder of microstructure risks in niche pairs than any systemic threat. Bitcoin remains resilient in a consolidating market post-2025 highs. Trade cautiously in illiquid environments.