Analysis: The flash crash in perpetual contracts of US AI concept stocks began at Binance, followed by a chain of liquidations.

October 18 - Tread.fi CEO DYJ posted an analysis of the flash crash in US AI concept stock perpetual contracts in the early hours of this morning, stating that the sell-off began on Binance. A trader closed approximately $2 million in long positions on SanDisk (SNDK), triggering a sharp drop across other markets amid thin order book depth.

According to the transaction timeline he listed, Binance SNDK was the first to see large aggressive sell orders, with about $407,000 traded in that second, followed by about $1.03 million in the next second; MU also began seeing sell orders in the same second.

DYJ stated that Hyperliquid subsequently saw sweeping orders, with about 10 addresses submitting IOC sell orders concentrated in SNDK, SOXL, DRAM, SKHX, SKHY, and MU within 1.8 seconds, followed by a second round of synchronized selling. These orders were all used to open new short positions rather than merely reduce positions.

In the minute of the first round of concentrated selling, Binance SNDK and MU recorded trading volumes of approximately $21.9 million and $5.1 million respectively, while Trade.xyz saw corresponding volumes of about $3.1 million and $300,000. MU trading volume on Hyperliquid then expanded to $10.8 million and $9.5 million respectively within the following two minutes, which DYJ attributed to cascading liquidations.