Bitcoin Price Glitch Sends Shockwaves Across Paradex Exchange
In a startling turn of events, the price of Bitcoin (BTC) momentarily crashed to $0 on the decentralized Paradex exchange due to a database issue. This unprecedented glitch caused widespread liquidations that rocked the crypto trading community.
What Caused Bitcoin’s Dramatic Price Drop?
Paradex, a decentralized exchange operating on the Starknet (a Layer 2 scaling solution on Ethereum), experienced a critical database migration issue. This affected its blockchain, block explorer, bridge, and API. As a result, the price of Bitcoin displayed incorrectly, leading to a cascade of liquidations.
The problem emerged around 12:36 a.m. ET on Monday, as indicated on the Paradex status page. Social media posts highlighted the situation, with users sharing screenshots of Bitcoin’s drop to $0.
How Paradex Fixed the Issue
By 2:00 a.m. ET, the exchange identified the problem and began rolling back its chain state to block 1604710—its last verified stable state before the database migration. This rollback ensured that all accounts were restored to their previous condition, safeguarding user funds and data integrity.
Paradex implemented the following steps to address the issue:
- Force-cancelled all remaining open orders to prevent further disruptions.
- Restored the accurate price display by fixing API and blockchain data.
- Confirmed all user funds were safe and announced they were “SAFU” (Secure Asset Fund for Users).
The Aftermath
Although Paradex successfully resolved the issue by approximately 5:16 a.m. ET, the event impacted trading activity significantly. Reports from CoinGlass show an estimated $875 million in liquidations over the past 24 hours, with $234 million attributed to Bitcoin alone.
DeFiLlama data reveals that Paradex currently handles around $641 million in open interest and has seen trading volume of $37 billion in the past 30 days.
Lessons for Crypto Traders
The Paradex glitch underscores the importance of caution while trading on decentralized platforms. With emerging technologies behind DeFi and blockchain networks, occasional technical hiccups may occur, reinforcing the significance of diversifying trading strategies and using stop-loss orders.
Stay Protected While Navigating Crypto Markets
For crypto investors, leveraging secure hardware wallets such as the Ledger Nano X (available here at ledger.com) can help safeguard digital assets from unexpected platform disruptions.
As the crypto market matures, incidents like this highlight the need for transparency, rapid response systems, and resilient trading infrastructure to maintain user trust.
