Huobi Token flash crashes, recovers quickly- Is there more than meets the eye
- HT token fell precipitously but soon regained ground during Thursday (9 March) trading hours.
- About $2.55 million worth of long positions were liquidated on Thursday.
Huobi Token [HT], the native token of the popular cryptocurrency exchange, Huobi Global, flash crashed by more than 60% during Thursday trading hours, falling from $4.74 to $1.83 in a matter of 25 minutes, as per CoinMarketCap.
The token, however, recovered immediately to $3.72. At the time of writing, the token exchanged hands at $3.82. down 20% over the past 24 hours. The precipitous drop placed HT at the top of the biggest crypto losers of the day.
The exchange’s advisor, Justin Sun, termed the crash as a normal market behavior that happened because some users triggered a series of leveraged liquidations. Sun added that Huobi will create a $100 million fund to improve the liquidity depth of HT and other cryptos.
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
Read Houbi Token’s [HT] Price Prediction 2023-24
Crash due to increasing FUD?
As per data from Coinglass, the number of long liquidations for HT surged to $2.55 million as of 9 March, a whopping 13413% increase from the previous day.
The crash could be due to the increasingly negative sentiment that has engulfed the wider cryptocurrency market following the hawkish stance of financial regulators and the recent collapse of the crypto-friendly bank, Silvergate.
Twitter users weren’t too convinced with Justin Sun’s rationale behind the crash and even questioned the idea behind the proposed $100 million fund. Consider this tweet, for instance.
Few questions, Justin ? pic.twitter.com/LrhkOAIUxK
— Josh (@Josh94K) March 10, 2023
HT’s supply on exchanges falls
The flash crash led to a drastic increase in the number of short positions taken for HT. The Longs/Shorts Ratio fell from 0.99 to 0.87.
The news of the crash created significant buzz for HT on social media as data from Santiment showed that the social volume soared to its monthly high on 9 March.
The supply on exchanges recorded a sharp fall as users took their funds out of centralized trading platform fearing an FTX-like scenario.
Are your holdings flashing green? Check the HT Profit Calculator
Meanwhile, Huobi Global recently announced that it was in the process of applying for a trading license in Hong Kong, following the region’s plan to allow retail investors to trade in popular cryptocurrencies.