It seems The Grinch has stolen any holiday joy that the cryptocurrency market could muster, especially for one beleaguered altcoin. On Dec. 9, the Matic price saw nearly three-quarters of its value shaved off amid a wave of panic that sent crypto traders scrambling. The Matic price has since recovered from a low of $0.012 on Dec. 10 to $0.018 today though it remains down a steep 8% in the last 24 hours. The coin’s market cap has been slashed more than in half from more than $100 million on Dec. 8 to $48.2 million currently. Not surprisingly, this has sent the Matic team into a tizzy, pointing fingers directly at one social media account.Source: TradingView
The Matic price fell fast and furiously on Monday, plummeting approximately 70% in a little over 30 minutes. The Matic team is blaming the price spiral on an erroneous tweet sent by Samuel JJ Gosling, who has fewer than 1,000 followers. Gosling, the founder of self-governing crypto evaluation platform Validity, sent a tweet on Dec. 9 stating that the Matic Foundation sent roughly 1.5 billion MATIC, or 15% of the supply, over the course of the last 50 days seemingly for liquidation on cryptocurrency exchange Binance. It turns out Gosling’s numbers were off, sending him into apology mode and placing the Matic team on the offensive toward what it described as a “FUD account against Matic team.”
As it turns out, however, Gosling’s tweet may have exacerbated the selling pressure in Matic coin but it didn’t trigger it. After reviewing the timeline of the tweet vs. the sell-off, it turns out that Gosling’s misguided analysis came after the dump began. Regardless, the damage is done. The Matic team believes the project will “bounce back stronger than ever,” but as one trader said on the Twitter thread, “liquidated investors will not come back tho.”
Matic is a product of the Binance Launchpad, which is a platform for launching new tokens. As a result, Binance CEO Changpeng Zhao felt compelled to defend the project that his team so carefully vetted for the April 2019 Initial Exchange Offering (IEO).Source: Twitter
“All I have to say is, no shit. What did you expect?!? Trade in shitcoins and you’re gonna get REKT!!”
The Matic debacle thrusts altcoins into the spotlight once again as the crypto market largely readies another bitcoin bull run. Market dynamics have changed dramatically from the 2017 rally in which bitcoin was a rising tide that lifted all boats. This time around, investors are doing more due diligence before backing smaller projects, not to mention the fact that regulators are on the prowl for security-like coins.Source: Twitter
While the Matic sell-off was painful, it also shined a spotlight on a more mature cryptocurrency market, one that increasingly supports margin trading for altcoins. A report in beincrypto.com suggests that Binance should cease from supporting margin trading in altcoins because it only creates “manipulated price collapses” that “hurt the industry.” The author paints a picture in which crypto whales are manipulating the circulating supply by shorting on margin and then dumping, thereby creating a domino effect and earning a profit. Other altcoins were not unscathed in the sell-off, including coins such as Harmony, Ravencoin (whose price is on the mend), and Elrond.