Bitcoin’s $24,000 flash on Binance: Risks explained
The BTC/USD1 trading pair on Binance experienced a brief flash crash. Bitcoin fell to $24,000 before quickly recovering.
The incident did not affect Bitcoin prices on major pairs such as BTC/USDT. However, it highlighted liquidity concerns in newly launched trading pairs.
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BTC/USD1 fall to $24,000 exposes low liquidity risks
According to market data from Binance, the event only lasts for a few seconds. The BTC/USD1 price later stabilized above $87,000.
USD1 is a new stablecoin issued by World Freedom Finance. The project is supported by the family of US President Donald Trump.
Binance charts showed a downward wick. The move did not cause any liquid damage.
The incident happened during Christmas. During that time, the volume of transactions has decreased significantly. Some observers speculate that the move is a test of liquidity for the BTC/USD1 pair.
Joao Wedson, founder of Alfractal, explained that this phenomenon is often seen in bear markets. During those stages, capital flows will weaken.
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“The low exchange rate in some trading pairs has led to high volatility, causing temporary price spikes and arbitrage cases for a few minutes. This is more common than it seems when the market is in a slow phase,” explains Joao Wedson.
Another, more detailed explanation from the investor community linked the event to Binance's promotional campaign USD1. Binance recently launched a 20% API promotion for one user up to $50,000 per USD1.
The popular market watch account WuBlockchain has seen a sharp rise in USD after its launch. Supply increased to over 45.6 million tokens in a few hours. The total market capitalization increased to more than $2.79 billion.
The sudden influx of capital to USD1 boosted the value of Storicoin by 0.2%.
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The X account punk revealed that many investors have tried arbitrage. They borrowed $1 and sold it at the local market to participants who gradually joined the promotion.
Meanwhile, some traders chose to sell through the BTC/USD1 pair. The thin liquid caught them off guard. Prices fell significantly, which resulted in the result described above.
“This is just a small fluctuation in a bear market. No need to worry. Many similar fluctuations will appear later,” said investor Pank.
Could the same thing happen to BTC/USDT?
A broader question now draws attention. Could a similar event occur on the BTC/USDT pair? This pair has the highest liquidity in the market. A sudden failure can cause huge losses.
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Commentator Martin cited data from Caico. Over the years, Bitcoin's 1% market depth has increased significantly.
“Depth didn't just recover. It widened. At the October 2025 highs, Binance 1% depth exceeded $600 million. That level is above the 2022 crash levels,” Martan said.
He also emphasized that the drop in BTC/USDT price will not reduce the liquidity. In the period of more than 100 days, the BTC/USDT pair decreased by 21.77% (from $110,291 to $86,089). Average daily spot volume during that period was $19.8 billion, for a total of $613.5 billion.
With deep market depth and abundant volume, a similar event on BTC/USDT remains unlikely.
However, the incident serves as a lesson for traders. It is important to choose trading pairs carefully. Low liquidity pairs can cause serious slippage and unexpected losses.
