A variety of altcoins and memecoins experienced a significant sell-off on April Fools’ Day, April 1, with certain tokens, such as Act I The AI Prophecy, seeing a nearly 60% decline within minutes.
The token Act I The AI Prophecy (ACT), which is linked to a project centered on artificial intelligence, tumbled by 58% from $0.19 to $0.08 in under an hour on April 1, resulting in a market cap loss of $96 million, as per information from market tracking data.
This drastic drop in ACT coincided with widespread losses in the altcoin sector, as memecoins like sudeng (HIPPO), CZ’S Dog (BROCCOLI), Kishu Inu (KISHU), DeXe (DEXE), dForce (DF), and others also experienced notable price declines.
Despite these upheavals in the altcoin market, the overall cryptocurrency market remained relatively stable, with major cryptocurrencies such as Bitcoin (BTC) staying in the green during that time.
### Act I Acknowledges the Situation
The drastic decline of the ACT token caught the attention of many on social media, prompting Act I to reach out to its community on X, assuring them that the project is fully aware of the situation at hand.
“Our team is actively examining and working with all relevant parties to resolve this issue,” they announced, adding that they had begun collaborating on a “response plan” with trusted partners.
Certain crypto analysts tied the sudden price movements to a margin update from Binance.
### Binance’s Leverage Update Results in $3.8 Million Liquidation
Data from the blockchain analytics platform Lookonchain suggests that Binance’s recent adjustments to leverage and margin tiers for tokens like ACT on April 1 led to substantial liquidations among larger market players.
“Binance updated leverage and margin tiers for tokens such as ACT—resulting in a whale being liquidated for $3.79 million at $0.1877,” Lookonchain reported on X.
According to a post from Binance, its derivatives platform, Binance Futures, made updates to leverage and margin tiers for trading pairs, including ACT against Tether USD (USDT), at 10:30 UTC.
### Speculation Around Wintermute’s Selling Activity
The downturn in altcoins occurred amidst community speculation regarding selling by the global algorithmic trading firm Wintermute, which allegedly liquidated several altcoin positions on April 1.
Some market commentators even speculated that the selling activity could be linked to a hacking incident, while many expressed bewilderment over the underlying reasons for this sell-off.
“Market makers aren’t just killing their own positions for no reason. It could be a hack, insolvency, or someone facing a severe margin call,” remarked one observer.
There were also theories suggesting that Wintermute was involved with a USD1 stablecoin associated with World Liberty Financial, which has ties to Donald Trump.
“This could be significant for them, prompting them to de-risk assets that might not comply with or align with their new institutional direction,” claimed one user.
In a discussion on social media, Wintermute’s co-founder and CEO denied any association with the altcoin sell-off on April 1, stating they were not responsible and expressed interest in analyzing the situation.
Following this, the user who initially alleged Wintermute’s involvement expressed regret, noting that they improve market conditions for traders compared to their competition.
Attempts to reach Wintermute for a comment regarding the market fluctuations were unsuccessful before publication.