Binance IEO Matic Network [Matic] dropped 60% from a price of $0.041, on Monday; it records a daily low at $0.011.
The dump initiated a series of memes and jokes about the fall. However, the buyers of the cryptocurrency just experienced a thrilling cryptocurrency roller coaster. Crypto investor, TraderXO who was even apprehensive of a dump tweeted,
Ok – no one expected this much of a dump in one hour
So What Happened with Binance IEO Matic Network?
Matic Network primarily trades on Binance with around 95% of the total trading volume. Hence, the most obvious suspicion would be a dump at the exchange. The memes of Binance CEO, Changpeng Zhao pulling off the dump are rampant in crypto-twitter.
The charts reveal an apt example of a pump and dump pulled off in the crypto markets. MATIC gained 175% in less than a fortnight, as the price skyrocketed from $0.015 to $0.041.
MintFlint Airdrop has been identified as the leading cause of the pump. The crypto project announced leveraging MATIC for their scaling solution and also distribute Flint tokens equivalent to the amount of MATIC held by users.
Ironically enough, MintFlint platform ‘allows traders to subscribe to other traders and be notified when they buy/sell coins.’
One of the other leading causes of the drop has been the 20X leveraged margin trade listed on India’s derivatives exchange, Delta Exchange, last month. Moreover, Binance also supports leveraged trading on it.
The cryptocurrency also lacks proper distribution and hence the liquidity is low as well. Samual JJ Gosling, a crypto analyst tweeted,
… [I] thought it was an exit but it’s just the free market. The real root of this volatility is an insanely skewed distribution of $MATIC which equals a highly illiquid market. “The top 100 holders collectively own 99.11% (9,911,470,937.07 Tokens) of #Matic Token”
In short, the small market capitalization of the cryptocurrency was far too susceptible to manipulation and whale action. Some of the other IEO also followed suit at Binance with the Matic Network like the Harmony (One) and Ravencoin as well. The cryptocurrencies are down 18% and 25% respectively.