A number of altcoins and memecoins saw a sharp sell-off on April Fools’ Day, April 1, with some tokens, including Act I The AI Prophecy, dropping nearly 60% in minutes.

Act I The AI Prophecy (ACT), a token associated with the eponymous project focused on artificial intelligence, plunged 58% from $0.19 to $0.08 in less than an hour on April 1, with its market cap shedding $96 million, according to data from CoinMarketCap.

The sharp drop of ACT came along with notable red action in the altcoin market, with memecoins like sudeng (HIPPO), CZ’S Dog (BROCCOLI), Kishu Inu (KISHU), DeXe (DEXE), dForce (DF) and more seeing significant price declines.

Cryptocurrency market at a glance. Source: Coin360

The broader crypto market hasn’t reacted negatively to panic in altcoin markets, with major cryptocurrencies like Bitcoin (BTC) remaining green at the time of writing.

Act I “fully aware of the situation” 

The massive drop in the ACT token has not gone unnoticed on social media, with Act I taking to X to assure its community that the project is fully aware of the current situation.

“Our team is actively investigating and working collaboratively with all relevant parties to address this matter,” Act I wrote, adding that it also started developing a “response plan” with its trusted partners.

Source: Act I The AI Prophecy

Some crypto commentators linked the sudden price movement to a margin update by Binance.

Binance’s leverage update triggers a $3.8 million whale liquidation

According to data from the blockchain analytics tool Lookonchain, Binance’s update of leverage and margin tiers on tokens like ACT on April 1 has triggered some massive liquidations among whales.

“Binance updated leverage and margin tiers on tokens like ACT — and a whale got liquidated for $3.79M at $0.1877,” Lookonchain said in an X post.

Source: Lookonchain

According to a blog post by Binance, its derivatives platform, Binance Futures, updated to leverage and margin tiers for pairs such as ACT versus Tether USDt (USDT) at 10:30 UTC.

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The update affected existing positions opened before the update, potentially leading to some position expirations, Binance noted.

Speculation over Wintermute selling

The altcoin bleeding came amid community speculation surrounding selling by the global algorithmic trading firm Wintermute, which reportedly liquidated multiple altcoin positions on April 1.

Some market observers even suggested that the selling was due to a hack, while many expressed confusion over possible reasons for the selling’s root cause.

“MMs don’t just nuke their own books for fun. Either it’s a hack, insolvency, or someone is getting margin called hard,” DEFI Kadic commented.

Some also speculated about Wintermute interacting with the USD1 stablecoin by Donald Trump-linked World Liberty Financial.

Source: Daniele (Degen Arc)

“That being a major deal for them, they are derisking all assets that might be non-compliant or non-matching the new brand direction they are taking of an institutional player,” the X user claimed.

Wintermute co-founder and CEO Evgeny Gaevoy denied the company’s involvement in the altcoin massacre on April 1 in a social media exchange with X user ilikeblocks.

“Not us [for what it’s worth], but also curious about that post mortem,” Gaevoy wrote.

Source: ilikeblocks and Wintermute co-founder and CEO Evgeny Gaevoy (wishfulcynic)

Ilikeblocks later posted to express regret for their initial allegation about Wintermute.

“They’re making markets better for all of us and in comparison to their competition they’re really not that shady,” they added.

Cointelegraph approached Wintermute for comment regarding the market action but did not receive a response by the time of publication.

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