World’s third largest stablecoin by market capitalization Binance USD (BUSD), Binance cryptocurrency Wednesday morning as liquidity dried up in the stock market DAI It quickly dropped as low as $0.20 against the stablecoin.
BUSD Price Quickly Returns To $1 After Its Drop
The drop was triggered by a single market sell order of $647,000, which resulted in a gradual drop by as much as 20 cents. BUSD immediately regained its value against DAI on Binance as arbitrage traders were able to buy for under $1 on Binance and sell for $1 on another exchange.
According to Binance’s order book at the time of this writing, there are $3.38 million in bulk orders ranging from $1 fixed to 20 cents; which means it will take a market sell-off of $3.38 million to push the price back to that level.
The fact that Wednesday’s sell order of $647,000 triggered a bearish move of this magnitude meant that liquidity was either pulled from the order book shortly before the sale was made or a pricing error did not account for pending buy orders.
BUSD has been plunged into regulatory bickering after the New York Department of Financial Services (NYDFS) ordered Paxos to stop issuing stablecoins, and this move will cause the supply of BUSD to go to zero over time.
Binance said in its statement that they would continue to support BUSD for the foreseeable future, but they moved away from the token, arguing that the token was not released by them.
*Not investment advice.
For exclusive news, analytics and on-chain data Telegram our group, twitter our account and YouTube Follow our channel now! Moreover Android And iOS Start live price tracking right now by downloading our apps!