Polyhedra Network price crashed by over 60% on Sunday, making it one of the worst-performing tokens in the cryptocurrency market. The ZKJ token plunged to an all-time low of $0.30, down by 88% from its highest point this year. This retreat brought its market cap to $236 million, down from $625 million a day earlier.
Why Polyhedra Network Price Crashed
The ZKJ token plunged on Sunday, mirroring that of Mantra, which also plunged by over 90% a few months ago.
In a statement, the developers attributed the crash to:
“abnormal on-chain transactions within a very short period on the ZKJ/KOGE trading pair.”
The team emphasized that the fundamentals of the network were strong in terms of its technology and the community.
Its response mirrored that of Mantra, which attributed the OM price crash to liquidations by an exchange.
In most cases, however, such a big drop is usually because of insider activity. One user on X noted that the Polyhedra Network moved $40 million on Saturday to a dozen of addresses, which then started to dump them in the market.
Binance largely confirmed that large holders, who could be insiders started dumping the token. Its statement said:
“Binance is aware that ZKJ and KOGE have experienced significant price volatilities and our initial findings indicate the developments were a result of large holders removing on-chain liquidity, and a liquidation cascade in the market.”
CoinGlass data shows that all bulls were liquidated as the Polyhedra token price crashed. The daily bullish liquidation jumped to over $97 million.
Read more: Top Catalysts for BTC and Altcoins Like XRP, LayerZero, and Centrifuge
Is it Safe to Buy the ZKJ Price Dip?
Polyhedra Network price has crashed, making its token much cheaper than it was a day ago. This plunge may attract investors who are buying the dip.
However, history shows that catching a falling knife can be dangerous. For example, investors who bought the initial Mantra price crash, which also happened on a Sunday, are still in the red as its price has plunged by another 74% from its initial crash
The most likely scenario is that ZKJ token will have a dead-cat bounce soon. A dead-cat bounce is a situation where an asset in a free fall rises temporarily and then resumes the downtrend.
Mantra had a similar price action as it jumped by over 100% a few days after its plunge. This bull trap attracted some retail investors who then lost it all when the decline resumed.
