Sebastian Salach

It all goes down, I still pull the rabbit out of my magic hat.
#bitcoin and daily trading

[Sebastian Salach @SSalach]

@theionicXBT hilarious this posts always pop up after down moves. crypto twitter.

[Mr. Anderson @Truecrypto]

Last Friday delivered one of the worst altcoin wipeouts in crypto history, and the post-mortem of it has been a whisper.

When LUNA blew up, it owned the news. When FTX collapsed, it ruled the cycle. When we had our COVID crash, Crypto Twitter couldn’t stop talking about how we almost went to zero and what saved us.

But this time, a week later, there’s near silence. Instead, we’re told it was just a tweet. That’s not serious analysis. Yes, late Friday, Trump dropped a trade-war headline after U.S. markets closed: 100% tariffs on China and new export controls. That was the spark.

But a single tweet doesn’t send alts down 70% in minutes or vaporize entire portfolios within an hour.
The violence came from structure, from a breakdown deep in crypto’s plumbing.

During the flush, Ethena’s synthetic dollar, USDe (ticker USDe), printed as low as $0.65 on Binance while holding near $1 on other venues. This wasn’t a global depeg. It appears to have been a Binance-local pricing failure, an oracle and order-book divergence that instantly slashed collateral values for users on Binance’s unified margin system.

When your collateral is repriced that far down on a single venue, everything built on it collapses.

On Binance’s unified / cross-margin system, traders can post multiple assets, including USDe and wrapped tokens, as collateral across all their open positions.

When Binance’s feed suddenly marks USDe at $0.65 instead of $1.00, the user’s collateral value shrinks, maintenance ratios blow up, and the liquidation engine begins selling their other assets, often high-beta alts, into an already collapsing market.

Those forced sells push prices lower, triggering more liquidations across the exchange and, through arbitrage, across the entire crypto market.

Example:

Imagine a trader with $200,000 total equity.

$50,000 in USDe collateral

$150,000 in long altcoin positions

Binance marks USDe at $0.65, so that $50,000 becomes $32,500; In this case, $17,500 in margin cushion vanishes instantly.

The system detects the shortfall and auto-liquidates part of the alt positions to rebalance. Those sells slam into thin order books, driving alt prices down another 20–30% almost instantly.

Now the trader’s remaining alts, which weren’t yet liquidated, are worth even less, cutting collateral ratios further and triggering the next round of liquidations.

Each liquidation dump pushes prices down for everyone else using the same assets as collateral, igniting a chain reaction. By the time the loop finishes, hundreds of millions in positions are forcibly sold, and the cascade becomes self-fueling, a liquidation spiral that consumes everything in its path.

What started as a local pricing glitch becomes a global liquidity collapse.

Arthur Hayes @CryptoHayes summed it up perfectly: “USDe didn’t depeg. Binance did.”

The Ethena protocol remained solvent and over-collateralized. The problem was the venue’s internal feeds and book structure under stress.

When an exchange values collateral based on its own shallow order book instead of a broad market reference, small cracks become sinkholes.

This doesn’t absolve Ethena, any asset printing 35% below peg, even locally, shows fragility. But this wasn’t another LUNA.

It was a mechanical failure, a venue-specific collateral mispricing colliding with excessive leverage and opaque cross-margin rules. The result was one of the largest liquidation waves in crypto history, nearly $19 billion in forced unwinds within 24 hours.

That doesn’t happen from headlines. It occurs when margin engines and oracles fail under stress.

Binance has since promised to compensate affected users and rework how wrapped and synthetic assets are priced. That alone is an admission something broke. And yet, this event has been largely swept under the rug thus far.

We’ve seen bigger macro shocks before: Liberation Day, COVID, and even FTX contagion, yet none triggered alts to implode 70–99% in an hour.

This wasn’t fear. It was faulty design.

One venue’s pricing feed dislocated, collateral collapsed, and liquidation engines spread that contagion everywhere. The industry’s core issue is now undeniable: Too many opaque, venue-specific risk systems govern leverage, collateral, and liquidation.

When one breaks, the entire system pays for it. Design flaws, not tweets, keep blowing up the market.

If this reconstruction is wrong, then @binance and @cz_binance should publish the data:

Which feeds broke and when?

Which collateral assets were hair-cut, and how many users were liquidated? How is the compensation being calculated?

And @ethena should release a venue-by-venue chart showing USDe pricing, redemptions, and hedging during the event, to prove solvency and pinpoint where the break occurred.

Roughly $19 billion didn’t vanish into thin air. People were liquidated, portfolios erased, and careers ended because the pipes broke. If this wasn’t the cause, prove it. If it was, fix it.

Because headlines aren’t destroying crypto, it’s being destroyed by its own infrastructure.

This can’t be another story buried under “macro fear.” The silence is the loudest signal of all.

Systems failed. Users paid the price. And the industry owes them an explanation.

If we don’t fix the plumbing now, the following “tweet” could light the same fuse, and eventually, there might not be much left to save.

Because if a tweet can burn $19 billion, it’s not the tweet that’s the problem; it’s the system.

[Sebastian Salach @SSalach]

@JamesWynnReal 104,330$

[ElonTrades @ElonTrades]

The Oct 11 Crypto Crash — What Really Happened

TL;DR:

Roughly $60–90M of $USDe was dumped on Binance, along with $wBETH and $BNSOL, exploiting a pricing flaw that valued collateral using Binance’s own order-book data instead of external oracles.

That localized depeg triggered $500M–$1B in forced liquidations, cascaded into $19B+ globally, and earned the attackers about $192M via $1.1B in BTC/ETH shorts opened on Hyperliquid hours earlier, but minutes before Trump tariff announcement.

It wasn’t a USDe failure!! It was Binance’s design flaw, timed with macro panic (Trump’s tariffs) for cover.

What looked like chaos was actually a coordinated exploitation of Binance’s internal pricing system, amplified by a macro shock and systemic leverage.

1️⃣ The Setup

Binance’s Unified Account let traders use assets like USDe, wBETH, and BNSOL as collateral.

Instead of oracle or redemption prices, Binance valued these using its own spot market - a major vulnerability.

On Oct 6, Binance announced a fix to move to oracle-based pricing, but rollout wasn’t until Oct 14, leaving an 8-day window.

2️⃣ The Exploit

During that window, sophisticated actors manipulated Binance’s order books, dumping ~$60–90M of USDe, driving it to $0.65 on Binance only (still ~$1 elsewhere).

Because the Unified Account marked collateral to internal prices, this instantly wiped margin value and triggered $500M–$1B in forced liquidations.

Then, Trump’s 100% China tariff headline hit, magnifying panic and liquidity stress.

3️⃣ The Profit Engine

The same day, fresh wallets on Hyperliquid opened $1.1B in BTC/ETH shorts, funded by $110M USDC from Arbitrum-linked sources.

As the Binance cascade unfolded, BTC and ETH cratered, those shorts netted $192M in profit before closing out at the bottom.

Timing, precision, and funding paths all suggest coordination.

4️⃣ The Contagion

Binance liquidations dumped BTC/ETH/ALTs into thin books.

Other exchanges mirrored the collapse through cross-market bots.

Market makers hedged across venues were forced to unwind everywhere.

Result: $19B+ global liquidations, with many alts down 50–70% intraday, all triggered by <$100M of manipulated collateral.

5️⃣ Who’s at fault?

Binance: design flaw + delay in oracle rollout = root cause.

Exploiters: executed and timed the manipulation, profited via external shorts.

Ethena (USDe): not at fault - protocol stayed 1:1 collateralized, redemptions normal, peg held everywhere else.

6️⃣ Aftermath

Binance admitted “platform-related issues,” promised compensation for affected margin/futures/loan users, and rolled out minimum price floors + oracle integration.

USDe remained operational, and the incident is now a case study in how exchange-side pricing errors can trigger system-wide liquidations.

Bottom line:
A ~$90M dump on Binance and a $1.1B leveraged short elsewhere sparked a $19B bloodbath.

Not a stablecoin failure, but a masterclass in exploiting flawed collateral valuation during peak macro stress.

[Sebastian Salach @SSalach]

@KoroushAK risk

[Arthur Hayes @CryptoHayes]

Word on the street is that big CEX’s auto liquidation of collateral tied to cross margined positions is why lots of alts got smoked on the move down. Congrats to all you stink bidders. We won’t be seeing those levels any time soon on many high quality alts.

[Cobie @cobie]

Probably one of the most severe flushes I’ve ever seen on alts, I didn’t even imagine alts had this much leverage in them. It feels like someone got hit very hard and will see a large body float to the surface soon, reminds me a little of summer 2021.

Good reminder to myself to own things that I am actually bullish on, and not things I am trying to shift on momentum. Some charts look like they’ll never recover, whereas some things look buyable for the first time in a while.

When everyone is making hilarious amounts of money I am always tempted to start using leverage again. It is almost impossible to fight the feeling that you’re not making enough, or everyone else is outpacing you. Good reminder that fighting that feeling and avoid the wipeouts is worth it in the end.

Check on your friends, likely a bad day for many.

Personally, am concentrating my bags into the things I am happy to own for the next few years, and shedding the fat. Realised I own some assets based on not wanting to miss out, rather than on some actual thesis. Days like today are much easier for me if I think my bags will bounce back, and much worse if I’m losing money owning things I don’t even believe in.

Don’t let a leverage blowup dictate your long-term views. The future is bright, good things to come, patience is rewarded.

嵐の後

[Maelstrom @MaelstromFund]

https://t.co/1BaqtQnxk6

[CryptoAmsterdam @damskotrades]

Market outlook

altseason always comes in the last leg

the grand finale

let’s take a look

(1/4)👇

[Lookonchain @lookonchain]

A whale spent 4,806 $ETH($21.25M) to buy 938,489 $LINK across 5 wallets 8 hours ago.

This whale is smart:

- Made $4.14M by trading $ETH during $USDC depeg

- Dumped $ETH before the UST/LUNA crash

- Bought $SHIB early and sold all $SHIB at the May & Oct 2021 peaks

Address:
0xa65840c0ae791cd70bd6ecc4c0eb6ed51775fc0b
0x61b76b2b3d9c3E9169408FD6215837F5B6500EC3
0x07e561fA2e1FF222585D6B764E5113F6087B46db
0xCEd78D9aA9161beDb9cc076452151B98687837b9
0xA96b198214007B01DE4A73bb91C49EcD80356C0d

[Pix🔎 @PixOnChain]

i went back to see what your fav CT accounts were posting at the peak of the 2021 bull

the takes aged like milk (and a few like fine wine)

1. Ansem:

peak timing. scary good.

[Alex @AlexOnchain]

I quit my job last year, flew to Mexico and just kept traveling for the next 14 months

It was amazing - I wouldn't trade it for anything

Finally got round to writing up:
• My full route
• How much I spent (it's not what you think)
• My favourite places

Full travel thread:

[Arkham @arkham]

BREAKING: ARKHAM UNCOVERS $3.5B HEIST - THE LARGEST EVER

LuBian was a Chinese mining pool with facilities in China & Iran. Based on analysis of on-chain data, it appears that 127,426 BTC was stolen from LuBian in December 2020, worth $3.5 billion at the time and now worth approximately $14.5 billion.

Neither LuBian nor the hacker have publicly acknowledged the hack. Arkham is the first to report it. Details below:

[Nature is Amazing ☘️ @AMAZlNGNATURE]

I honestly believe this is one of the biggest mysteries there is, Orcas are the most efficient predators on earth, yet they have never attacked us in the wild. They know something we don’t.

[Red Pill USA @Red_Pill_US]

@IanMalcolm84 Listen to Jacob Rothschild say it with his own mouth: “My family created Israel.”

[Cobie @cobie]

If u have to buy liquid/non-venture crypto for 3-5 yr time horizon, and ur not allowed to buy BTC, ETH, HYPE, SOL or hold stablecoins, what do u buy and why? Want to find some intelligent ppl with good/non-obvious ideas to follow, thx

[PJ Ace @PJaccetturo]

I used to shoot $500k pharmaceutical commercials.

I made this for $500 in Veo 3 credits in less than a day.

What’s the argument for spending $500K now?

(Steal my prompt below 👇🏼)

[Chase @Crypto_Chase]

Price action is doing a great job of inciting FOMO here imo. $BTC and $SPX both basically up only for the past month.. all we're missing the final liquidity generating event.

I personally don't think anything has really changed macro wise, at least not enough to warrant everything to new all time highs.

My take is that this grindy upwards PA is slowly flushing out bears.. and they're just about ready to throw in the towel. What we need now is the final liquidity generating event.. BTC to 100K and SPX to 5800.

Short stops trigger, bears throw in the towel and start buying, "new all time highs incoming", the perfect storm. Just the recipe to allow whales to exit before a summer of bearish chop.

If it comes, I'm ready.

[Sebastian Salach @SSalach]

@qrsupport @Asif_Simjee @qrsupport this for deletion, missleading

[nick.eth @nicksdjohnson]

Recently I was targeted by an extremely sophisticated phishing attack, and I want to highlight it here. It exploits a vulnerability in Google's infrastructure, and given their refusal to fix it, we're likely to see it a lot more. Here's the email I got: