Bitcoin Briefly Dips to $24,000 on Binance Due to Liquidity Glitch

Bitcoin Dips to $24,000 on Binance

In an unexpected move, Bitcoin's price momentarily dropped to $24,111 on the BTC/USD1 trading pair on Binance late Tuesday before quickly rebounding to above $87,000, according to exchange data.

This sharp fluctuation was isolated to the USD1 pair, a stablecoin backed by World Liberty Financial, and was not observed in other major BTC pairs. The pair quickly returned to near-normal market prices.

Such sudden price wicks are typically attributed to thin liquidity or display issues rather than a systemic market crash. Stablecoin pairs that are new or less-traded often suffer from limited market makers, resulting in shallow order books.

Potential causes for these dislocations include large market sells, liquidations, or automated trades that swiftly deplete bids, causing temporary price drops. These can also arise from spread widening, faulty market maker quotes, or trading bots responding to unusual prints.

During periods of low activity, these effects can be more pronounced due to the lack of participants to stabilize prices.

While such price wicks can appear dramatic, they are usually considered microstructure events rather than indicators of Bitcoin's overall market direction. However, they underscore the risks of executing trades in thinly traded pairs, particularly when liquidity is still developing.