XPL price continued its strong downtrend, reaching a record low today, November 3, despite major developments on the Plasma network. Plasma was trading at $0.2590, down 85% from its all-time high. This crash has lowered its market cap to $466 million from over $3 billion.
Plasma Network is Thriving
The XPL price has crashed despite data showing that the network is thriving. According to Nansen, the network’s transaction volume rose by 245% over the last 30 days to over 48.9 million.
The platform also shows that the number of active addresses jumped by 327% in the last 30 days to over 1.79 million. Its fees jumped by over 84% to $88k during this period. This growth makes it one of the fastest-growing players in the crypto industry. The other leading networks are Sonic, Optimism, BNB, and Algorand.
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Plasma has also become the sixth-biggest chain in the crypto industry after Ethereum, Solana, BNB Chain, and Base. This growth will likely continue after the developers integrate it with LayerZero, one of the biggest bridges in the crypto industry.
The volume of the plasma network in the decentralized exchange (DEX) industry soared in October. It soared to $2.3 billion, up from $1.21 billion the previous month. The biggest DEX dApps in the network are Uniswap, Balancer, Fluid, and Lithos.
Why the XPL Price is in a Freefall
However, there are some potential reasons why the XPL price is falling. First, Plasma will undergo major token unlocks, as the circulating supply of 1.88 billion tokens is well below the maximum supply of 10 billion.
Plasma will start having over 227 million monthly unlocks on October 25. Token unlocks might lower the asset’s price by increasing the supply, especially if they are not immediately absorbed by traders or investors.
Another possible reason is that it is a relatively new token that launched in late September. It is common for newly launched tokens to crash as airdrop recipients start selling. Some of the recently launched tokens, like World Liberty Financial (WLFI), Wormhole, and LayerZero, have all plunged.
The XPL price has also crashed as the stablecoin supply in the network has plunged in the past few days. DeFi Llama data shows that the network’s stablecoin supply has dropped to $3.4 billion, down from the all-time high of $6 billion.
Plasma prices have also dropped due to rising market fear. The Crypto Fear and Greed Index has crashed to the fear zone, with Bitcoin and other coins being in the red.
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