Home Crypto News Dump It: Popular Crypto Matic Drops 70% In Under An Hour

Dump It: Popular Crypto Matic Drops 70% In Under An Hour

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Buy or sold dilemma

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. pic.twitter.com/zo9LzP80L8

— Alex Krüger (@krugermacro) December 10, 2019

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.

— Crypto King (@JBTheCryptoKing) December 10, 2019

Crypto twitter erupted with speculation on what caused the epic dump of an altcoin that was up 200% this month. Binance appears to be where the carnage happened as it currently has almost the entire volume.

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.”

Current theory on $MATIC: 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. Other coins like $RVN dumped 30m later which points towards a ripple effect

— Stillman (@Stillman_Crypto) December 10, 2019

MATIC Network was one of Binance’s Initial Exchange Offerings and it appears that the exchange can inadvertently take life as well as inject it into an altcoin. According to the blurb it was pitched to be the next greatest thing in blockchain by offering a layer 2 scaling solution that achieves scale by utilizing sidechains for off-chain computation.

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.

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 pic.twitter.com/dloId3zEGP

— Mike McDonald (@MikeMcDonald89) December 10, 2019

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 #Binancehttps://t.co/FLPl4HyfiO pic.twitter.com/dpYG8rMoHX

— Samuel JJ Gosling (@xGozzy) December 10, 2019

Other cryptocurrency traders such as ‘Welson’ called it a massive pump and dump which is exactly what the chart looks like at the moment.

“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.

MATIC is not the only token plummeting at the moment. The big dump appears to have cascaded into a few of the other illiquid cryptocurrencies including Energi and Ravencoin which have both shed 20% at the same time.

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.