Asia’s crypto markets have shown signs of recovery after a turbulent weekend marked by the largest liquidation event in cryptocurrency history, totaling approximately $20 billion.
Bitcoin stabilized near the $115,000 mark following a sharp 9% decline last Friday and a moderate rebound over the weekend. Meanwhile, Ethereum led the resurgence, climbing back to around $4,150 after dropping nearly 17% at the market’s lowest point. The swift recovery in Ether is attributed to the rapid unwinding of leveraged positions and renewed activity within decentralized finance (DeFi) protocols.
Other tokens also experienced notable gains. Solana surged 11% to $196, Bittensor posted a 28% increase, and Cronos rose 11%, reflecting a rotation of capital back into high-volatility assets once the forced deleveraging subsided. Factors contributing to the market’s cooling include easing trade tensions between Washington and Beijing, which provided some relief amid broader geopolitical uncertainties.
According to Jonathan Man from Bitwise, the extensive use of leverage across smaller-cap tokens intensified the magnitude of liquidations when liquidity dried up. This intense clearing out of positions has, however, paved the way for a more orderly market reset. Additionally, Ethereum’s network structure played a protective role; with nearly 30% of ETH supply locked in staking validators but only a fraction circulating as liquid staking derivatives, frantic sell-offs were partially muted, preventing a deeper liquidity crisis.
In the aftermath, attention has turned to Binance amid claims about the mechanics of the selloff. Haseeb Qureshi of Dragonfly Capital challenged the notion that the Ethena stablecoin depegged during the crash. Instead, he suggested that $60–$90 million worth of USDe, along with wrapped assets wBETH and BNSOL, were offloaded onto Binance. This action allegedly exploited a pricing flaw where Binance’s order books, rather than external oracles, determined collateral valuations. This mismatch led to wrapped tokens diverging from their underlying asset prices.
As Binance’s systems struggled under significant load, market makers found it difficult to hedge or balance their holdings, amplifying pressure on prices. Notably, USDe’s value dropped to $0.65 solely on Binance while remaining close to $1 on other platforms like Curve and Bybit. Because Binance’s unified margin system used internal prices for collateral marking, the resulting price disparity triggered a cascade of margin liquidations amounting to hundreds of millions of dollars.
Despite the turmoil, Ethena’s USDe protocol maintained full collateralization and redeemability throughout, indicating the disruption stemmed from exchange infrastructure issues rather than a failure of the stablecoin itself. Binance has acknowledged “platform-related issues,” has transitioned to oracle-based pricing for collateral, and committed to compensating traders impacted by the event.
Binance co-founder Yi He confirmed these challenges on social media, recognizing brief service interruptions and transient deviations in specific yield products following the market-wide selloff. The exchange has reported disbursing over $280 million in compensation to affected users and clarified that it will not cover routine market losses.
As the markets continue to stabilize, investor focus has shifted back to assets most affected by the liquidation cascade. Bitcoin and Ethereum’s resurgence suggests that the crypto ecosystem is adjusting to the recent shakeup, with improved risk sentiment and renewed DeFi engagement driving momentum.
Beyond cryptocurrencies, gold prices surged to a record $4,059.87 per ounce in early Asian trading, fueled by escalating U.S.-China trade tensions, geopolitical risks, and expectations of imminent Federal Reserve interest rate cuts, underscoring a broader shift towards safe-haven assets amid global uncertainties.
In related news, the airdrop for the Aster token has been postponed due to discrepancies in token allocation data, according to reports. Additionally, tokenization firm Securitize is reportedly in discussions with Cantor SPAC as it explores new market opportunities.
