Interesting price action was experienced in Huobi Token over the past 24 hours in which the digital currency, native to the Huobi Global exchange experienced a flash crash with its price dropping by as much as 93%. In what is considered a very rare event, the digital currency rebounded at almost the same rate within a short time.
The Huobi Token (HT) traded as low as $0.31 at 21:00 UTC on Huobi, a figure that was also recorded as its lowest score in more than a year. The coin is now changing hands at a spot price of $4.31 atop a 15.84% price plunge.
It is not uncommon for digital currencies to lose their valuation by more than 50%, however, the last time such a situation arose, the token, Terra (LUNA) has not been able to gain the same recovery since last year May to date. Many analysts are still trying to understand what happened with the HT token and what exactly triggered the massive flash crash.
When such massive flash crashes occur, technically, liquidations are bound to take place. According to data from Coinglass, Huobi has recorded a total liquidation worth over $51 million over the past 24 hours, a trend that is regarded as both an aftermath of the HT flash crash as well as the industry’s bearish slump.
In a bid to help ameliorate the situation, Justin Sun, the Founder of the Tron Blockchain with affiliation to Huobi has promised to inject $100 million to help improve the liquidity pool of the exchange.
“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,” he said in a tweet, adding that the trading platform will “continue to improve the liquidity depth of main cryptocurrencies and HT token, strengthen leverage risk warnings and liquidity capabilities. Regarding this incident, we will keep the community updated on the follow-up progress.”
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
Huobi Crash and the Sun Effect
While some industry observers and stakeholders have been raining accolades on Justin Sun for his response and effort to bolster the exchange, new data from Arkham Intelligence might change people’s perspectives.
The data analytics and intelligence firm said the crypto veteran has been shuffling around some stablecoins over the past couple of hours with massive funds being removed from the Huobi Exchange.
“Justin Sun has been shuffling around some stablecoin positions over the past 24 hours. He initially withdrew $60M in USDT, USDC, and USDD from @HuobiGlobal, making deposits in @AaveAave. 12 hours later, he redeposited 100M USDC to Huobi,” the update reads.
Whether or not Sun’s withdrawals and deposits are fast in the crash of HT is unknown, however, the transactions show huge fund movement can offset the balance of a relatively stable platform.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.