Traders on Binance.US noticed an unusual wick on their screens close to midnight on June 20, with the price of Bitcoin appearing to surge ahead of $138,000. 

A similar situation took place on Binance.US in October 2021, when Bitcoin’s price flash crashed 87% below its market value on other exchanges. A Binance.US spokesperson told CoinDesk at the time that the crash that brought Bitcoin’s price from $65,760 to $8,200 was caused by a bug in an institutional customer’s trading algorithm.

Binance.US is yet to acknowledge the dramatic surge in Bitcoin’s price, leaving market participants to speculate that the cause might be due to poor liquidity for BTC against USDT on the platform. If the exchange’s order book liquidity was inadequate, it is likely that a market order for Bitcoin was filled at an unrealistic “joke bid” price. 

Earlier this month, crypto research firm Kaiko found that market depth on Binance.US had dropped 78% since the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against the firm.

Market depth, which measures the level of liquidity on trading platforms, fell from $34 million before the SEC lawsuit to under $7 million on June 12. 

“The sharp drop in liquidity suggests market makers are nervous and want to avoid volatility-induced losses and the non-negligible possibility that their assets could get stuck on an exchange à la FTX collapse,” noted Kaiko in a newsletter published last week.

The exchange has also lost a considerable amount of market share to competitors in the country. Binance.US’s share of the U.S. market has dropped from 20% in April to just 4.8% today.