On Monday, the crypto industry was in a sea of red as the fear and greed index tumbled and Bitcoin crashed below $64,000. Newly listed tokens also crashed heavily, costing investors millions of dollars.
New token airdrops have tumbled
zkSync was down by over 10% on Monday and by over 40% in the past seven days, giving it a market cap of over $614 million. Similarly, LayerZero has dropped by over 30% since launch as its market valuation tumbled to over $700 million.
Notcoin’s NOT token price has crashed by over 30% in the past seven days, while its market cap has dropped to about $1.46 billion. This token had a valuation of over $3 billion at its peak.
Notcoin’s drop is mainly due to the current state of the crypto market, where most have tumbled. The crash is also due to the rising competition in the Telegram tap-to-earn industry, where platforms like Dotcoin, Hamster Kombat, and TapSwap have gained market share. Hamster’s users have soared to over 150 million.
Meanwhile, the Wormhole price has tumbled by over 40% in the past 30 days to $0.3380, bringing its market cap to over $608 million.
Other cryptocurrencies have also tumbled in the past few days. Pepe has retreated by 22% in the past month, while Solana, Manta Network, Ethereum, and Starknet have crashed by double digits.
Why these tokens have crashed
There are three main reasons why these tokens have all tumbled. The primary reason is that Bitcoin has failed to move above the crucial resistance level of $72,000 and has also tumbled to below $64,000. In most cases, Bitcoin (BTC) sets the tone for the crypto industry.
Bitcoin crashed recently because it lacked any positive catalyst. The SEC approved spot Bitcoin ETFs in January, while the halving event happened in April. Also, the Bitcoin ETF industry has seen outflows in the past three weeks.
Second, these tokens have dropped as most of their airdrop holders sell their tokens. It was reported last week that over 60% of the zkSync airdrop holders dumped the token shortly after it happened.
Third, there is a sense that traders are starting to get fearful. The crypto fear and greed index has dropped to 49 from the year-to-date high of over 90. If the sell-off continues, the index will likely tumble to the fear zone. In most cases, cryptocurrencies drop when there is a sense of fear and vice versa.
So, what next for cryptocurrencies like zkSync, Wormhole, LayerZero, and Notcoin? I suspect that these tokens will remain under intense pressure this week unless Bitcoin stages a comeback and cruises above the resistance point at $62,000.
