- About $760 million of OKB’s market cap was wiped out during the steep decline.
- The wild fluctuation occurred due to liquidation cascades.
Cryptocurrency exchange OKX’s native token OKB flash crashed by more than 25% during the trading hours of January 23.
The cryptocurrency plummeted from $51.99 to $39 in a matter of 10 minutes, AMBCrypto noted using CoinMarketCap facts. About $760 million of OKB’s market cap was wiped out during the steep decline.
Source: CoinMarketCap
However, the coin quickly recovered to $48 and has been stable at that level ever since.
OKB hit by liquidation cascades
The wild fluctuation occurred due to liquidation cascades, by OKX’s own admission. The official handle of OKX Chinese said on X:
“After the currency price reached 48.36 $USDT at 17:07:26 (HKT) this caused the liquidation of several large leveraged positions. Coupled with the impact of market conditions, the currency price fell, which further led to the liquidation of committed loans, leveraged transactions and cross-currency transactions. ”
Keep in mind that liquidation cascades occur when a sudden bullish or bearish event leads to forced liquidation of positions. The cascading effect has the potential to collapse the entire market.
OKX announced full compensation for users who lost their funds due to the abrupt liquidation, including pawn lending/margin trading/transactions in different currencies.
Flash crashes occur when one or more holders of an asset suddenly decide to sell, causing the asset’s price to plummet within minutes.
In the crypto market, this behavior is associated with whales – those who have a large amount of cryptos at their disposal.
However, unlike regular crashes, prices return to their original levels just as quickly.
OKB starts trending on socials
The developments increased the social value of OKB, AMBCrypto noted based on Santiment data.
Mentions of the coin on crypto-linked social media channels rose to the highest level since September 2023. However, the slump sent investor sentiment plummeting, sinking deep into negative territory.
Source: Santiment
Realistic or not, here is OKB’s market cap in BTC terms
OKX reserves remain intact
Notably, there have been no major outflows from OKX, showing that perceptions about the health of the exchange have not changed much.
$OKB, @okx ‘s exchange token is down 25% in the last 30 minutes, with no significant outflows from major asset reserves so far.https://t.co/PQ06Wsix82 pic.twitter.com/JsNnvuoDVA
— Ki Jonge Ju (@ki_young_ju) January 23, 2024