A little known token has become talk of town after it plunged 75% starting at around 00:50 London time.
The token fell from 460 sats to 385 in five minutes, before resting for 5 minutes, to then dive to 249.
There it does this five minutes rest again to fall to 200 within 5 minutes, where it repeats the rest to fall to 152. Then it recovers a bit.
This five minutes interval is a bit interesting because it suggests some sort of bot which maybe has gone a bit wrong, but according to Changpeng Zhao of Binance: “A number of big traders panicked, causing a cycle.”
Zhao says he was able to determine the above by “looking through the high impact/profit/loss accounts, and if the majority of them can be identified, ie, long term, known VIPs vs anonymous trader, etc.”
He says the Matic team has “nothing to do with it,” that being this crash, with some Tweet blamed that claimed 1.5 billion (circa $60 million at the peak) Matic tokens had been transferred to Binance in the past few days.
This was later clarified by Sandeep Nailwal, Co-founder & COO of Matic Network, who said only 248 million Matic tokens had been sent to Binance, worth about $10 million at the 4 cent price prior to the crash. That was around three days ago.
The current circulating supply is 2.5 billion tokens, so that circa 250 million is 10% of what’s on the market.
What is quite interesting is the timing of all this. In particular, the sell-off began at 00:50 AM London time. Twitter is saying the “offending” tweet was sent at 3:18 AM.
This is presumably London time as otherwise it wouldn’t be 10th of December with the above person stating his location as being in Ireland.
If the above facts are correct in regards to timing, then the above tweet has nothing to do with what at that point would have happened two hours prior and would have finished around one hour and a half before the crash.
However, it might not be this tweet but something else that might have caused panic:
This is a screenshot that has been shared on social media. It’s on Telegram, but the problem is this too is long after the event at 4AM London time.
So after quite some scrolling on Telegram to get to the midnight timeline, it appears traders reached a consensus of sorts that this was to fall, with Chainlink pumping fomoing.
The very small market cap of Matic at just $50 million makes this a tiny community that after a considerable rise was probably getting very nervous, and thus all rushed to the door.
So on balance and taking everyone at their word, we’d say what happened was this token rose way fast as can be seen in the featured image above. At some point, people got nervous. One hour to slowly sell is probably enough as can be seen on the chart where price is slowly going down. Add some FUD to it, spice it with 4chan rumors, some panic, and the slowly sold fiat now buys cheap coins.
Just another day in crypto land then. Nothing to see here. Move on.