Hassan Maishera
TL;DR
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Bitcoin briefly plunged to $48,000 on the decentralized exchange Lighter.
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The dip comes despite Bitcoin hitting $70k on major cryptocurrency exchanges.
Thin Liquidity Causes Bitcoin’s Flash Crash on Lighter
The broader cryptocurrency market rallied on Wednesday, with Bitcoin hitting the $70k mark across major cryptocurrency exchanges.
However, BTC’s price plunged by over 30% to below $48,000 on the decentralized perpetuals exchange Lighter in a violent move that lasted seconds.
This flash crash was in contraction to price action across other major exchanges. During the same session, bitcoin surged from below $64,000 to above $69,000, marking one of its strongest intraday rallies in weeks.
Lighter’s bearish wick was caused by thin liquidity, which amplified an otherwise routine trade. In shallow order books, even modest sell pressure can trigger exaggerated price swings, producing so-called flash crashes that don’t reflect the broader market.
Data shows that a single sell order of roughly 1,000 bitcoin — worth about $67 million at the time — wiped out available bids and briefly sent prices spiraling.
Bitcoin wicked down by 30% to 47.6K on Lighter 20 minutes ago. pic.twitter.com/eRmQf5fvdq
— MLM (@mlmabc) February 25, 2026
This event occurred because Lighter is a new decentralized exchange with less liquidity than its centralized counterparts. The sell order wiped out all available bids and pushed the price down to ~$47k before recovering instantly.
Lighter is a new decentralized perpetuals exchange seeking to challenge category leader Hyperliquid. Data obtained from The Block shows that the DEX briefly captured significant market share last November, processing over $292 billion in monthly volume, roughly a quarter of the $1.15 trillion traded across exchanges.
However, activity on the platform has cooled sharply since its token airdrop late last year. Traders who made up a chunk of the activities on the platform to farm rewards have since rotated out, and monthly volume fell to $70 billion in February out of a $500 billion total market.
