Huobi’s HT token, one of the larger cryptocurrencies with a market capitalization of about $630 million, experienced a wild price swing on Thursday, dropping 93% on the Huobi exchange before quickly rebounding.
The HT token, which is affiliated with Tron founder Justin Sun, dropped from a 24-hour-high of $4.81 to a low of $0.31 at around 21:00 UTC, according to TradingView’s pricing source. Other exchanges also saw a similar drop in price.
According to a researcher at Kaiko, the sudden drop in price is being attributed to $2 million worth of sales in the five minutes leading up to the crash, which is well above the normal buys on the HT-USDT pair, typically amounting to about $600,000. However, it’s unclear who was behind the sales and what their motivations were.
In the 5 minutes leading up to the $HT crash there was $2mn worth of sales compared to just $600k of buys on the main HT-USDT pair on Huobi pic.twitter.com/Z6sbgugSit
— Riyad Carey (@riyad_carey) March 9, 2023
In response to the crash, Sun took to Twitter to assure traders that Huobi’s operations, wallets, and backend are safe. He also apologized for the “leveraged liquidation on the market caused by a few users,” and promised that Huobi will create a $100 million fund to improve multi-currency liquidity.
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 an investment of 100 million US dollars.
— H.E. Justin Sun 孙宇晨 (@justinsuntron) March 10, 2023
As of the time of writing, the HT token had rebounded and was trading at $3.70 on the Huobi exchange.
Despite the rebound, HT is still down about 24% over the past 24 hours. The volatility of the cryptocurrency markets is well-known, but this sharp and sudden drop and rebound of HT is notable even in a space where such price swings are not uncommon.
The operation of @HuobiGlobal exchange is #SAFE, the wallets are SAFE, and the backend is SAFE. The recent market fluctuations and the leveraged liquidations were caused by few users triggering a cascade of forced liquidations in the spot and HT contract markets.
— H.E. Justin Sun 孙宇晨 (@justinsuntron) March 10, 2023
As always, investors and traders are reminded to exercise caution when investing in cryptocurrencies and to do their due diligence before making any investment decisions.
