The reason the majority of the cryptocurrency market has under-performed this year is lack of liquidity. Add margin trading to that and the potential of massive cascades in price arises as holders of the altcoin MATIC have just found out.
Cryptocurrency Collapse: MATIC Dumps 70%
A few hours ago MATIC dumped a whopping 70% in a matter of minutes. The collapse sent the token from $0.042 (560 satoshis) to $0.012 (165 sats) in an instant, leaving bag holders of this altcoin dazed and confused.
Crypto. The stuff of dreams and nightmares. $MATIC was up 180% in two weeks before crashing 70% in an hour.
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You are tellling me $MATIC went up 200+% in 12 days...
and went down 70% in 12 minutes...
And now commenting on TG is frozen...
Interesting to say the least.
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One plausible explanation was proposed by fundamental analyst ‘Stillman’;
“They did a shitcoin airdrop today, then the usual sell the news happened but for the first time we had margin trading on an illiquid Binance book in place to cause a cascade.”
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At the moment the token price is scaling rapidly in the wrong direction.
Whale Manipulation
Another plausible theory is that the top few MATIC addresses hold 99% of the supply which would lead to massive manipulation should there be a coordinated liquidation.
That woulda been nice to see. That was probably the initial order before he split it up.
Sort of. I sent this to my business partner at 7:51 EST claiming the walls were "big" and then still at 7:51 he had consolidated to the huge order in my other screenshot before splitting them up
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In terms of market cap equivalent the amount dumped equates to roughly $60 million. Other theories are also emerging;
Just did some snooping around to find that the #Matic Network Foundation has transferred 1,495,322,715 $MATIC (15% of the supply, approximately $67,314,942 at ATH) in the past 50 days, of which from seems to have been sent for liquidation at #Binance. etherscan.io/token/0x7d1afa…
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“This is why it’s never a good idea to FOMO into a shitcoin, especially when the owners have 90% of the supply. Once they’ve manipulated prices to a high level, they will sell everything and have the buyers be left holding the coins for life.”
Crypto Liquidity Woes
As previously pointed out by chart guru ‘Willy Woo’, 99% of the current altcoins on the cryptocurrency markets have virtually zero liquidity.
For an asset to be tradable it needs to have daily volume, and one that does nothing means that nobody is interested in buying or selling it. Coinmarketcap.com lists over 4,900 cryptocurrencies though only the top 40 or so have any measurable volume, the rest appear to be slow dying altcoins.
Fetch.AI, which is another of Binance’s IEOs, is also feeling the pain at the moment as it follows MATIC into the digital grave.
Image from Shutterstock
