Key Points:
- The price of the ZK has plummeted over 13% in a week due to heavy sell-offs following the ZkSync token launch.
- A significant number of airdrop recipients sold their tokens quickly, with 41% selling within hours.
- The situation worsened due to a performance glitch in the zkSync network.
ZkSync Token Launch Disappoints As ZK Price Drops Over 13% in One Week
The token experienced numerous sell-offs starting from the day of its listing, causing substantial dips in its value.
Initially, ZK saw a brief surge in market capitalization within the first few hours post-launch. However, this upward trend was short-lived as sell pressure mounted, particularly from airdrop recipients. The decline in value was exacerbated by broader unfavorable market conditions.
The zkSync airdrop program generated a frenzy of activity among recipients. Data from blockchain analytics firm Nansen revealed that a large number of the top 10,000 recipients quickly sold their newly acquired tokens. Only 30% of all addresses retained their entire allocations. Conversely, 41% of recipients sold their tokens within a few hours of receipt, highlighting a prevalent trend of cashing out swiftly.
The zkSync token launch was anticipated to be one of the largest airdrops of 2024, expected to benefit from bullish events like the Bitcoin halving and approvals of spot Bitcoin and Ethereum ETFs. Despite these positive forecasts, investor behavior diverged, with many opting to sell their holdings shortly after trading commenced.
Network Glitch Exacerbates ZK Token Sell-Off
Currently, ZK’s market capitalization stands at $625 million, with a fully diluted valuation of $3.67 billion, with a 36% decline from its launch valuation.
The situation was further aggravated by a performance glitch in the zkSync network, which struggled under the heavy load of the airdrop and subsequent selling activity. The zkSync team acknowledged a degradation in network performance on X, which seemingly accelerated the sell-off as recipients hurried to offload their tokens.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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