AB Token's 99% Plunge Exposes Crypto's Liquidity Weakness

The Binance Alpha (AB) token, a top ten asset on the Binance Alpha platform, experienced a dramatic 99% price collapse within two minutes on October 9, 2025, according to multiple market observers. The token's value plummeted from $0.0083 to $0.0000051, erasing nearly all its worth before recovering to $0.00151 and subsequently surpassing its pre-crash level to trade at $0.0084 by the following day. The event, one of the sharpest intraday crashes on a Binance-linked platform this year, has sparked widespread concern over liquidity vulnerabilities and market stability in the crypto sector.

Analysts attribute the crash to a large-scale, coordinated sell-off rather than technical failures or security breaches. Data from on-chain monitoring revealed two major transactions at 01:27 UTC: one wallet sold 192.37 million AB tokens for $932,790 USDT, followed by another wallet selling 501.43 million AB tokens for $282,910 USDT. These trades, concentrated in a two-minute window, overwhelmed the shallow liquidity pool-valued at approximately $2.17 million-leaving insufficient USDT reserves to absorb the sell pressure. Compounding the issue, the token's ownership is highly concentrated, with the top 10 holders controlling 97% of the circulating supply. This structural fragility amplified the impact of the sell-off, triggering a cascading price drop.

The crash highlighted systemic risks inherent in early-stage tokens listed on platforms like Binance Alpha. Such projects often face thin trading volumes and limited market depth, making them susceptible to manipulation by large holders or algorithmic trading anomalies. Coinpedia noted that the incident underscores the importance of liquidity and distribution in maintaining price stability, particularly in markets dominated by concentrated ownership. Additionally, a Reddit user proposed a margin liquidation theory, suggesting that leveraged positions on Binance were liquidated as prices dipped, triggering further sell-offs and a feedback loop of declining prices. While unverified, this hypothesis aligns with reports of traders sustaining significant losses, including a reported $600,000 loss.

Despite the token's rapid recovery, market sentiment remains bearish. CoinGecko data indicates 67% of traders view AB negatively, with lingering uncertainty over its long-term stability. The AB DAO team has not issued an official statement addressing the incident, deepening concerns about transparency and governance in decentralized finance (DeFi) projects. Meanwhile, the broader crypto community has called for stronger safeguards on exchanges, including enhanced liquidity protections, monitoring of concentrated ownership, and mechanisms to prevent sudden market collapses.

The AB token's volatility has reignited debates about the risks of high-leverage trading and the role of exchanges in mitigating systemic shocks. Coinengineer.net noted that 41% of tokens listed on Binance Alpha have experienced similar sudden declines, emphasizing the need for investors to adopt risk management strategies when engaging with low-liquidity assets. As exchanges like Binance face scrutiny over their oversight practices, the incident serves as a cautionary tale for both investors and platform operators in the rapidly evolving crypto ecosystem.

Source: [1] AB Token Crashes 99%, Then Makes Full Comeback - BeInCrypto (https://beincrypto.com/ab-token-binance-alpha-crash-recovery/)

[2] Why Binance Alpha (AB) Token Crashed 99%? - Coinpedia (https://coinpedia.org/news/why-binance-alpha-ab-token-crashed-99/)

[3] AB Token Plummets 99% in Minutes on Binance Alpha (https://thecryptobasic.com/2025/10/09/ab-token-plummets-99-in-minutes-on-binance-alpha/)

[4] Why Binance Alpha (AB) Token Crashed 99%? - Coinpedia (https://coinpedia.org/news/why-binance-alpha-ab-token-crashed-99/:~:text=Binance%20Alpha%20%28AB%29%20token%20crashes%2099%25%20in%20minutes)

[5] Binance Alpha Altcoin Flash-Crashes 99%... Then Snaps Back: Coordinated Dump? by Kamina Bashir (https://finance.yahoo.com/news/binance-alpha-altcoin-flash-crashes-104354987.html)

[6] AB Token Drops 99% on Binance Alpha, Quickly Recovers! (https://coinengineer.net/blog/ab-token-binance-alpha-flash-crash/)

[7] EXPLANATION: The recent crash was probably due to margin (https://www.reddit.com/r/CryptoCurrency/comments/mt5odv/explanation_the_recent_crash_was_probably_due_to/)