Plasma – How XPL’s rally ended in ‘embarrassing’ 46% crash

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Key Takeaways

What triggered XPL’s price crash? 

The bulk of selling pressure, unsurprisingly, came from unlocked supply flooding the exchanges, with Wintermute’s activities suspiciously aligning with the $1.68 peak.

What’s next for the altcoin? 

The cheap XPL piqued the interest of key players, but alas, speculative interest has not yet reversed its tragic course. 

In the thrilling tale of Plasma [XPL], the price plummeted by almost 50% following a savage sell-off post-TGE (token generation event). An unforgiving market cap crash from $3 billion to $1.6 billion left most of the bulls grasping for air, their dreams of the “stablecoin supercycle” dashed.

Now, let’s rewind: Plasma is a self-proclaimed L-1 blockchain network tailored for stablecoins and payments, backed by the likes of Bitfinex, Tether, Bybit, and Peter Thiel’s Founders Fund. With such powerful allies and the hype surrounding stablecoins, XPL was a sure-fire hit when it graced public trading on the 25th of September.

Presale investors were feeling smug with returns of 19X, quickly followed by a jaw-dropping 1,500% surge in price, from a modest $0.10 to a dazzling $1.68 after the exchange launch.

However, just four days later, the price dramatically nosedived, wiping out much of the initial windfall. Talk about a plot twist!

‘Team-driven dump’ accusations emerge

But, as every thriller must have its villains, it didn’t take long before whispers of a “team-driven dump” emerged. Within days, the price dropped 46%, from its lofty $1.68 perch to the grim depths below $1.

In the heat of this catastrophic downturn, the community quickly pointed fingers at the team and market makers, particularly Wintermute, accusing them of orchestrating the drop. After all, about 600 million tokens were supposedly sent to exchanges straight from the project’s wallet address.

Wintermute’s market-making activities were on the up-and-up, peaking precisely when XPL hit its zenith of $1.68. Coincidence? Hardly. A savvy analyst concluded that the sell-off could indeed be the handiwork of the project’s team, given the 4 million XPL daily selling pressure.  

The official project narrative explained that about 8% of the XPL supply (that’s 800 million tokens, for the record) was unlocked at launch to supposedly “support DeFi activities.” Suspiciously convenient, isn’t it?

Meanwhile, one disgruntled user was quick to label the entire debacle “embarrassing” for the Plasma team. Touché. 

Whales buy, retail retreats

But not all was lost in the abyss of plummeting prices-oh no! A whale emerged from the depths, snapping up discounted XPL like a hungry shark. In just the past three days, this mysterious figure acquired nearly 30 million XPL, worth an impressive $31.13 million.

Still, speculative interest showed no signs of recovery, and as of press time, the Open Interest had fallen from a once-robust $1.86 billion to a meager $1.20 billion over the past five days. Oh, the pain!

Moreover, XPL led the liquidation charge during a recent 4-hour period, with leveraged bulls losing around $10 million. Can someone call the paramedics? The sentiment remains as fragile as a soap bubble.

The good news? The latest correction has conveniently landed in the golden zone of the Fibonacci retracement tool, somewhere between $0.90 and $1.00. Historically, this level has been known to provide support. But, as always, should it break below, we might just be looking at another bloody massacre. 👀

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2025-10-01 12:13