LOOM Plummets by Over 70% Following Recent Exceptional Rally
Last week, Loom Network’s native token, LOOM, experienced a massive rally of over 1000%, only to sharply plummet afterward. The surge was driven by news of a partnership between Loom and Atlassian, with the latter acquiring Loom for $975 million. This caused LOOM to reach its peak price of $0.4846.
However, the excitement quickly faded away. Currently, according to CoinGecko data, LOOM is trading at around $0.1089, marking a 31% decline in the past 24 hours and a drop of over 70% since its recent surge.
Selling Pressure from Whale Causing LOOM’s Price Drop
Data from Lookonchain revealed that a single wallet holding 47% of the total supply of LOOM started selling after reaching its peak. This overwhelming selling pressure caused the price to crash as buying demand couldn’t keep up.
The dramatic rise and fall illustrates the fickle nature of crypto assets, especially smaller-cap tokens. Sentiment can pivot extremely quickly from euphoria to fear.
— LookIntoBitcoin (@lookintoBTC) December 2, 2021
This sharp rise and fall demonstrate how volatile crypto assets can be, particularly smaller-cap tokens. Sentiments can change rapidly from extreme excitement to fear.
Initially, the Atlassian deal generated significant hype for Loom Network. However, once the whale wallet started selling off its holdings, confidence evaporated, leading to profit-taking by other investors.
While the acquisition brought credibility to Loom Network, the concentration of token economics and distribution made the project vulnerable to this kind of collapse.
Now, Loom Network must face the aftermath of its brief moment in the spotlight. The challenge of sustaining long-term price growth remains a hurdle for many altcoins.
Hot Take: Loom Network’s Price Plunge Highlights Volatility in Crypto
The recent drastic drop in LOOM’s price after an exceptional rally serves as a reminder of the unpredictable nature of crypto assets. Even with promising partnerships and acquisitions, tokens can experience sudden and significant price swings. This volatility is particularly pronounced in smaller-cap tokens like LOOM. While these events may generate excitement and hype, they can quickly fade away when selling pressure emerges from large holders. It underscores the importance of careful consideration and risk management when investing in cryptocurrencies.
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