Bitcoin Didn’t Crash to $24K: Binance Wick on Illiquid Pair Explained

Bitcoin’s most liquid trading pairs never mirrored the decline, underscoring how isolated the event really was.

A sudden, dramatic price drop on Christmas Day saw Bitcoin (BTC) trading as low as $24,111 on a single Binance trading pair, causing panic on social media.

However, the event was not a market-wide collapse, but a fleeting liquidity vacuum on an obscure trading platform that was quickly corrected by automated bots.

Anatomy of a flash fuse

The reported “crash” occurred exclusively on Binance’s BTC/USD1 pair, a market with minimal trading activity. Like analyst Shanaka Anslem Perera explained,

“The ‘crash’ happened on ONE order book. Not on Bitcoin. Not on the market. One pair.”

He pointed out that data had confirmed that the primary BTC/USDT pair, where the vast majority of volume transactions take place, never fell below $86,400 during the incident.

According to him, the entire price disruption lasted about three seconds before arbitrage algorithms bought the cheap BTC, restoring the price to around $87,000. The market observer also noted that the pattern was not new, with a similar wick from $96,000 to $76,000 on the same USD1 pair on December 10.

Perera directly linked the instability to a Binance promotional campaign. “Binance launched a 20% APY promotion on USD 1 deposits 24 hours before this happened,” he noted.

This incentive, he said, caused a rush of traders to swap their USDT for the USD1 stablecoin to earn returns, draining sell-side liquidity from the BTC/USD1 order book. When one large sell order was placed on the market, it hit an empty book, causing the price to plummet until a bid was found.

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The Master of Crypto account too in summary it’s clear:

“That one trade wiped out the order book and pushed the price down for several seconds… Just a liquidity event, not a crash.”

Broader market context and persistent jitters

This micro-event occurred against a backdrop of broader market uncertainty, with Bitcoin’s price action jerky and repeatedly rejected almost the $90,000 level.

At the time of writing, the asset was trading around $88,500, showing modest daily gains but struggling for a clear directional breakout. Furthermore, the severe market crash on October 10, where Bitcoin lost more than $12,000 in a single day, psychologically scarred the crypto community.

As one expert recently said, “On October 10, something psychologically broke,” creating a lasting warning that makes the market sensitive to any sign of trouble, even illusory.

The Christmas Day fuse serves as a case study in how promotional activities can create predictable risks in illiquid markets and how sensational but incomplete information spreads quickly.

For traders, it highlighted the danger of new, thinly traded pairs, and for the broader market, it was a brief distraction from Bitcoin’s ongoing struggle to build momentum and shake off the lingering effects of a turbulent fourth quarter.