MATIC Crashes 67% in Two Hours, Prompting Conspiracy Claims

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MATIC suffered an extraordinary 73% collapse yesterday, including a 67% drop in just two hours, following a seemingly unstoppable three-week rise that had seen it grow 250%. Other alts such as RVN and ONE also suffered large double digit losses, but it was MATIC’s catastrophic collapse following is seemingly inexorable rise that caused the most comment, and led to further concerns over manipulation in margin trading environments.

MATIC Team Blamed for Token Dump

MATIC’s disastrous collapse was met with a typically swift response within the crypto community, with the team themselves having the finger pointed squarely at them following a supposed 1.5 billion token transfer from the Matic Foundation to Binance:

This theory took off and flooded crypto Twitter in a matter of minutes, getting plenty of subscribers along the way:

However, both Matic COO Sandeep Nailwal and Binance CEO Changpeng Zhao (CZ) were quick to deny the allegations that there was something sinister behind the dump, from their end at least:

True enough, having firmly embedded itself into the minds of those who like to cling to the most dramatic explanation of a situation before learning all the facts, the ‘team dump’ theory was soon debunked:

Whoops. It wasn’t long however before other theories were doing the rounds, including an airdrop sparking a selloff, while others turned their ire towards Binance, and in particular CZ, for allowing margin trading up to 125x, with the suggestion being that, having completed an epic three-week run, whales took a large short position on MATIC and dumped a bunch of tokens, causing a run on the token which took it back to where it started.

If Nailwal is to be believed and the team had nothing to do with the dump, then this is the most likely option, and is a reminder of what, of all people, Suppoman warned about last week – that margin trading is where whales play and small fish get eaten in droves. The other thing to take from this experience, which will very likely happen again, is that taking profit at 100-200% in a market such as this is not just advised, it is essential. Whatever goes up must come down, and as MATIC showed, the downside can be unexpectedly violent, and should offer an important reminder to all of us: