The Matic Network cryptocurrency (MATIC) plunged significantly in the past 48 hours, erasing a four-week rally that saw the alternative cryptocurrency appreciate by 280 percent.
It was a brutal reversal for the scalability-focused blockchain project’s coin. As recently as Dec. 8, it traded against bitcoin as high as 570 satoshis ($0.04) from 150 “sats” ($0.01) in the first week of November, according to Binance data.
Prices started losing altitude from 14:00 UTC on Monday. What initially seemed like a textbook technical correction due to overbought conditions turned into a full-blown sell-off with prices falling more than 67 percent (from 465 to 153 satoshis) in just 120 minutes beginning midnight UTC on Tuesday.
The exact reason for the selloff is not known. Binance CEO Changpeng Zhao tweeted that the MATIC team had nothing to do with the price drop and the crash was likely caused by panic selling by “big traders.”
Some investors, however, believe the selloff was caused by manipulative dumping.
Bryce Weiner, founder of startup exchange Altmarket and a popular Twitter personality wrote a thread accusing the MATIC team of engineering a pump and dump scheme. Other traders believe the price drop was caused by the unlocking or release of around 248 million MATIC tokens by the team.
Sandeep Nailwal, chief operating officer and co-founder of MATIC Network, trashed allegations of manipulation and assured investors that his team had nothing to do with the price drop. He backed up his claim in a tweet noting that a majority of tokens are still in MATIC’s foundation address and that the unlocking of the 248 million tokens in question was done in a staggered manner “so there is no large sell pressure on [the] community.” The unlocked tokens amounted to just 0.25 percent of the total supply, MATIC’s official twitter account claimed.
Whatever the cause, MATIC’s rapid rise over the past two weeks is now all but gone.