Analysis: Flash crash of perpetual contracts on US AI concept stocks may have originated on Binance, subsequently triggering cascading liquidations on Hyperliquid

On October 18 that Tread.fi CEO DYJ stated the flash crash of perpetual contracts on AI-themed US stocks originated at Binance. The first aggressive sell order for SNDK occurred at 21:21:59.39, with transaction volume reaching approximately $407,000 that second and jumping to around $1.03 million the next second; selling pressure for MU also emerged at 21:21:59.

Hyperliquid subsequently processed its initial batch of sweep orders at 21:21:59.87, which included SNDK IOC orders and SOXL trigger orders. The primary selling activity concentrated within an approximately 1.8-second window between 21:22:01.1 and 21:22:02.9, with roughly 10 wallet addresses simultaneously opening short positions in SNDK, SOXL, DRAM, SKHX, SKHY, and MU using IOC sell orders; a second synchronized sell-off occurred at 21:22:55.9. DYJ emphasized that all these orders were IOC type, none were reduce-only, and they functioned as newly opened short positions.

In terms of early volume, within the 21:22 minute, SNDK turnover on Binance totaled approximately $21.9 million compared to roughly $3.1 million on TradeXYZ; MU turnover on Binance reached approximately $5.1 million while TradeXYZ accounted for only about $300,000. Trading volume on Hyperliquid did not significantly amplify until 21:28 and 21:30, at which points MU turnover hit $10.8 million and $9.5 million, respectively. DYJ attributes this phase to subsequent cascade liquidations.