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Key Takeaways
- Bitcoin’s drop to $24,000 on Christmas Day 2025 occurred only on Binance’s USD1-BTC trading pair and did not reflect the broader market price.
- The event was a flash crash caused by thin liquidity and order-book mechanics, not a systemic sell-off or fundamental repricing of Bitcoin.
- Bitcoin continued trading near $87,000–$88,000 across major exchanges and liquid pairs during the incident.
- The USD1-BTC flash crash was fundamentally different from the Oct. 10 market-wide crash, which involved large-scale liquidations and broad market stress.
On Christmas Day 2025, Bitcoin briefly printed a price near $24,000 on the Binance BTC/USD1 trading pair before rapidly returning to the prevailing market range above $87,000 in seconds. This dramatic move was widely shared across social media and market charts but did not represent a true, market-wide collapse in Bitcoin’s value. Instead, it was a localized flash crash on one specific trading pair.
The USD1 asset used in this pair is a relatively new stablecoin, and the flash crash was confined to that pair’s order book. Prices on major Bitcoin markets, such as BTC/USDT on Binance and other exchanges, did not show a comparable drop, indicating that the broader market did not reprieve Bitcoin to $24,111.
The key point: this was a pair-specific dislocation, a sharp “wick” in one order book, not a market-wide repricing of Bitcoin. By contrast, the Oct. 10, 2025 event (“10/10”) was a broad, leverage-driven market break involving forced liquidations across crypto and deep, systemwide liquidity stress.
According to Wimar.X (@DefiWimar), a similar flash event occurred in October involving the WBETH/USDT trading pair on Binance. In that incident, the price reportedly fell from around $4,000 to roughly $430 within seconds, before rebounding sharply within minutes.
Wimar.X claims the sudden move resulted in large-scale liquidations and significant profits for certain market participants, and argues that such episodes point to recurring structural vulnerabilities in exchange-level market mechanics rather than normal price discovery.
These allegations have not been independently verified, and Binance has not publicly attributed the incident to manipulation. However, the comparison highlights ongoing concerns among traders about liquidity gaps, leverage, and order-book dynamics on less liquid trading pairs.
Why Bitcoin Price Crashed to $24,111 on Binance’s USD1-BTC Pair
Flash crashes like this occur when liquidity, the amount of buy and sell orders near market prices, is thin. On pairs with shallow liquidity, even a single aggressive order or a gap in resting bids can cause prices to “sweep” down through the order book and print an unrealistically low price. Once new bids appear or the order is filled, the pair quickly reverts to a price that reflects the wider market.
Reduced liquidity often happens during quiet trading periods, such as public holidays or outside peak hours, because fewer participants and market makers are active. When combined with thin books, this environment increases the likelihood of extreme but short-lived price movements in less liquid pairs.
This type of event differs from a systemic crash because it affects only one trading pair’s internal pricing dynamics, not the overall balance of supply and demand across the entire Bitcoin market.
USD1 Liquidity Gaps and Bitcoin’s Rapid Price Rebound
The USD1 asset underlying the BTC/USD1 pair was launched earlier in 2025 and has lower trading depth than major stablecoins like USDT or USDC. Lower depth means less market-making support and fewer bids near the current price, making the pair susceptible to volatile prints when large orders hit the order book.
Because BTC/USD1 is not widely used as a reference pair in global Bitcoin pricing, its extreme prints do not affect benchmark prices used by most traders, custodians, or pricing indices.
Binance’s Price Response
Within moments of the flash drop, Bitcoin’s price on the USD1 pair rebounded back toward $87,000+, aligned with prices seen on dominant markets.
The rapid reversal signals that the initial drop was a temporary microstructure anomaly rather than a fundamental shock to Bitcoin’s broader valuation.
How A Local Bitcoin Flash Crash Differs From Oct. 10 Liquidation Event
October 10, 2025 Crash
- The October 10, 2025 crypto crash was a broad, systemic event that affected prices across Bitcoin, Ethereum, and many other digital assets on major venues and trading pairs. It coincided with heightened geopolitical risk and risk-off behavior in global markets, amplifying crypto’s volatility.
- During that event, more than $19 billion of leveraged positions were liquidated in a short period, reflecting a true market stress scenario with cascading effects.
- Bitcoin itself fell significantly on multiple liquid markets during the October episode, and the crash was widely felt across futures and spot markets, not isolated to a single trading pair. Forced liquidations, shrinking liquidity, and rapid deleveraging drove prices lower as traders were unable to manage risk effectively.
Bitcoin’s Christmas Day Flash Crash
- The December 25, 2025, crash was limited to the BTC/USD1 spot order book on Binance and did not influence Bitcoin’s global price on major pairs.
- Microstructure anomaly due to thin liquidity and a shallow order book on a niche pair, leading to a quick “wick” before reversal.
- Affects one pair, quickly corrects back to wider market levels.
| Features | October 10 Flash Crash | December 25 Flash Crash |
| Primary trigger | Geopolitical: Surprise 100% U.S. tariff announcement on Chinese imports. | Seasonal: Low holiday volume and “Santa Claus Rally” fatigue. |
| Technical cause | Binance “Oracle” glitch (USDe mispricing) & systemic liquidation cascade. | Typical holiday liquidity thinning; no major infrastructure failures reported. |
| Bitcoin price action | Plunged from $122,500 to $104,000 (14% drop) in hours. | Stable, trading in a tight range between $86,400 and $88,050. |
| Total liquidations | $19 Billion+ (Largest single-day wipeout in history). | Minimal; estimated under $100 Million across most venues. |
Why Traders Should Understand The Difference
For market participants, distinguishing between a microstructure flash crash and a systemic sell-off is crucial. A localized flash event, like the one seen on Binance’s USD1-BTC pair, demonstrates how thin liquidity and niche pairs can generate misleading price data that don’t reflect the underlying market. Traders who use benchmark prices and liquidity-weighted indices can avoid misinterpreting such extreme prints.
By contrast, widespread crashes with high leverage, like the October event, often signal real changes in risk appetite and liquidity conditions and require different risk management responses.
Are Binance and Wintermute Causing Crypto Market Flash Crashes?
Claims linking major exchanges and market makers to crypto flash crashes frequently surface after extreme price dislocations. Following the Bitcoin $24,000 flash crash on Binance’s USD1-BTC pair, some market participants again questioned whether large entities such as Binance and market makers like Wintermute play a direct role in triggering these events.
At present, there is no public evidence proving that Binance or Wintermute intentionally caused the USD1-BTC flash crash. Neither entity has been formally accused by regulators, nor has any investigation concluded that the event resulted from coordinated manipulation rather than market mechanics.
What Is Known
Binance operates the trading infrastructure and order-matching engine but does not directly control how individual market orders interact with liquidity at a given moment. Flash crashes can occur when order books are thin, especially on secondary or low-usage trading pairs, allowing large market orders to sweep through bids and produce extreme price prints.
Wintermute, like other professional market makers, provides liquidity across multiple exchanges and trading pairs. Market makers routinely move assets between venues, adjust quotes, and rebalance exposure in response to market conditions. These activities are standard and legal components of modern crypto markets and, by themselves, do not constitute manipulation.
What Remains Unproven
Some social-media commentators have pointed to large on-chain transfers and balance changes involving market makers around the time of flash crashes. However, on-chain movement alone does not establish causation. Transfers can reflect inventory management, hedging, collateral adjustments, or internal accounting, and do not prove that a specific trade caused a price dislocation.
Importantly, no verified data has shown that Wintermute or any other market maker executed the trades that directly pushed Bitcoin to $24,000 on the USD1-BTC pair.
Structural Issues Versus Intentional Manipulation
Market experts generally distinguish between structural vulnerabilities and deliberate manipulation:
- Structural vulnerabilities include low liquidity, fragmented markets, high leverage, and automated trading systems reacting simultaneously.
- Manipulation requires intent, coordination, and evidence of deceptive practices, none of which has been established in this case.
Most documented crypto flash crashes, including historical incidents across multiple exchanges, have ultimately been attributed to market structure and liquidity gaps, not coordinated actions by exchanges or designated market makers.
Regulatory Perspective
To date, regulators have not concluded that major crypto exchanges or licensed market makers are systematically causing flash crashes. Investigations into past extreme volatility events have focused primarily on risk controls, leverage limits, and market resilience, rather than intentional price suppression or profit-seeking conspiracies.
While Binance and Wintermute are central players in crypto market infrastructure, current evidence does not support claims that they are deliberately causing flash crashes. The USD1-BTC event aligns more closely with a microstructure failure on a low-liquidity trading pair than with coordinated manipulation.
Until verified findings or regulatory actions indicate otherwise, flash crashes should be understood as a risk inherent to fragmented, high-speed digital asset markets, not proof of intentional wrongdoing by specific firms.
What This Flash Crash Means For Bitcoin Price Moving Forward
Price discovery for Bitcoin relies on aggregated data from multiple exchanges and highly liquid pairs. Singular events on low-depth pairs can create dramatic price visuals but should not be used as standalone signals for market direction or macro trend analysis.
Investors, analysts, and automated systems typically prioritize deep and liquid venues to avoid being misled by anomalous price prints.
The Christmas Day flash crash reinforces the importance of depth, liquidity, and market breadth over isolated price wicks when assessing cryptocurrency markets.
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FAQs
What caused the USD1-BTC flash crash
The flash crash was caused by low liquidity and order-book imbalances on the USD1-BTC pair. In shallow markets, a single aggressive trade or lack of buy orders can cause extreme but short-lived price prints.
Why didn’t the crash spread to other exchanges
The event was isolated to one trading pair with limited depth. Arbitrage and price discovery mechanisms rely on highly liquid markets, which remained stable and prevented the anomaly from propagating.
How was this different from the October 10 crypto crash
The Oct. 10 crash was a system-wide event involving high leverage, forced liquidations, and falling prices across multiple assets and exchanges. The Christmas Day flash crash was a localized pricing anomaly with no broader market impact.
Disclaimer:
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