The token for Matic Network (MATIC), a layer-2 scaling solution for Ethereum, has been one of the hottest trades in town over the last few weeks.
Since November 22, MATIC had rallied over 190% to its peak, helped along by a number of announcements that show Matic Network is quickly becoming a popular network for conducting non-fungible token (NFT) sales.
However, the music suddenly stopped for the MATIC rally late Monday night, resulting in a sell-off of more than 60%.
The crash looks to have started slowly before picking up pace, indicating that the drop was likely brought on by major liquidations from panicked traders. Leveraged trading for MATIC is available both on Binance and FTX, a derivative trading platform.
Binance CEO Changpeng “CZ” Zhao tweeted that the exchange is investigating the flash crash after some in the crypto community noted the Matic Network team may have been dumping coins, based on transfers from the Matic Foundation to the exchange in the days leading up to the crash. However, signs point to over-leveraged traders dumping their positions (or getting liquidated) in a coin that lacks sufficient liquidity.
Our team is still investigating the data, but it's already clear that the MATIC team has nothing to do with it. A number of big traders panicked, causing a cycle. Going to be a tough call on how much an exchange should interfere with people's trading. https://t.co/wOVF6tEBkQ
— CZ Binance (@cz_binance) December 10, 2019
“We want to strongly state that the allegations of token movement from our Foundation account, made by a FUD account against [the] Matic team are completely baseless,” the Matic Network team added in a response posted early Tuesday morning that provides an accounting of the Foundation’s tokens.
MATIC is currently down 50.8% on the day to $ 0.020161, giving the token a $50.9 million market cap.
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.