On December 25, bitcoin briefly fell to $24,000 on Binance's USD1 pair before quickly returning to more usual levels. Such an unexpected movement calls into question the stability of illiquid pairs and risk management on exchange platforms. In a rapidly evolving crypto market, this incident reveals the challenges related to liquidity and regulation.
In brief
- On December 25, 2025, Bitcoin briefly reached $24,000 on Binance, before quickly rising back to more traditional levels.
- This fluctuation was caused by low liquidity on the BTC/USD1 pair, a recently launched stablecoin.
- Trading pairs with low liquidity are particularly sensitive to large moves, thereby amplifying volatility.
- This event highlights the risks of using illiquid pairs, especially during periods of low activity.
A brutal fall on Binance
An unexpected event shook Binance on December 25, where the price of bitcoin briefly plunged to $24,111 on the BTC/USD1 pair, before quickly rising to levels near $87,000.
This sudden drop, although spectacular, revealed specific issues related to the liquidity of trading pairs.
Here is the key elements relating to incident:
- The lightning movement occurred during the night from Wednesday to Thursday, before stabilizing in a few seconds;
- The price of the flagship crypto bottomed at $24,111, a considerable deviation from its usual level of over $87,000;
- This phenomenon only affected the BTC/USD1 pair, an asset associated with a relatively new stablecoin, launched by the Trump family-backed company World Liberty Financial;
- According to Binance, the drop was due to low liquidity on this specific trading pair. The absence of active institutional investors made the order book too thin to absorb large volumes without causing extreme price movements;
- This event was not observed on any other major BTC pair, suggesting that the problem was localized to the BTC/USD1 pair and not a general market deterioration;
- Within seconds, the price quickly rose back above $87,000 once buy orders restored market balance.
This incident exposes the challenges posed by illiquid trading pairs, especially when associated with stablecoins or new projects without sufficient market volume to handle large fluctuations.
The Volatility of Low Liquidity Pairs
The volatility observed on the BTC/USD1 pair calls out the risks associated with the use of less liquid trading pairs.
Indeed, the shallow order book depth on this pair can amplify price movements, creating dramatic fluctuations that do not necessarily reflect the reality of the overall market.
According to experts, these events are often due to a problem with the microstructure of the market, as indicated by the extreme fluctuations observed during off-peak hours, where liquidity is particularly thin. This can result in temporary price gaps that are more visible than what traders call “market anomalies”but which do not signal a fundamental change in bitcoin itself.
The major risk lies in the use of stablecoins or new pairs still in development. These less popular pairs do not yet have sufficient liquidity to absorb large capital movements without causing slippage. Traders must therefore be extra careful, particularly during periods when the market is less active.
This incident signals the risks associated with low liquidity pairs, highlighting the need to strengthen platform stability. In this context, Binance strengthened its ties with Trump via the USD1 stablecoin, an initiative that could play a key role in the future of crypto exchanges, while attracting new questions about market regulation.
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