The cryptocurrency landscape is constantly shifting, and Plasma (XPL) is no exception. Following a much-anticipated airdrop, which initially created significant buzz, the token has begun to lose momentum. Let’s dive into what could be behind the decline and its potential future trajectory.
The Post-Airdrop Surge and Its Decline
Plasma (XPL) experienced a substantial early surge in activity after launching an airdrop valued at 10,000 XPL to initial users. However, as the hype settled, the token’s momentum began to dwindle. The most recent data shows an 11% drop in price during a trading session, matching similar declines seen across the crypto sector with tokens like Starknet (STRK).
Token Unlocks and Market Concerns
The pressure on XPL is partly tied to significant token unlocks. On November 25th, 88.88 million XPL—worth approximately $18.13 million—was released into circulation. This event leaves over 80% of the total supply still locked, but the influx of circulating tokens has weighed heavily on market sentiment.
As XPL joins other projects in the category of $80 million worth of weekly unlocks, its short-term market structure appears bearish. Key metrics such as Stablecoin TVL (total value locked) saw a 68% drop since October, sitting at $1.82 billion. Decentralized exchange (DEX) trading volume also tumbled—from $47.81 million on November 19th to $8.39 million.
Plasma’s On-Chain Activity
The bearish trend is not limited to price action. On-chain data indicates a slide in user engagement and transactions, with transaction count slipping from 42,398 to 39,725. New daily user counts are at a modest 137, while returning users total 1,831. Collectively, these declines highlight diminishing investor confidence, compounding the bearish technical setup seen on price charts.
Technical Analysis: Potential Future Trends
XPL currently shows signs of a bearish pattern, trading within a descending trend channel. Over the past five days, the token’s value dropped by over 36%. The Bull Bear Power (BBP) indicator reported consistent bearish dominance, with net trade volume reflecting a negative value of $5.07 million.
If sellers maintain control, analysts suggest the token could target a price of $0.15. However, a decisive breakout above resistance could reverse the bearish sentiment, potentially spurring a recovery, though such signs have yet to emerge.
The Broader Context of Crypto Trends
As the crypto sector navigates challenges like high volatility and unpredictable market pressures, Plasma’s trajectory reflects broader trends. Nevertheless, investors are advised to stay cautious and conduct thorough research before diving into this or similar assets.
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