Simply put
- The token dropped 15% to $0.03, reversing earlier gains from its launch this week.
- There’s an imbalance in the order book, and decreasing volume suggests early sellers and new short sellers are driving the market down.
- This decline follows incidents of network impersonation, despite the chain having 150,000 users and a surge in stablecoin transactions.
Monad, the native token of a recently launched Layer 1 blockchain, faced further losses on Thursday, continuing the trend of volatility since its introduction about three days ago.
The cryptocurrency fell 15% to $0.03 in the last 24 hours after dropping from $0.04 during US trading. It’s still up 47% since its debut on November 25, largely due to a significant rally from an opening price of approximately $0.02, as per CoinGecko data.
There are indications that after Monad stabilized around $0.47 on November 26, it turned negative as early token holders began to take profits influenced by changes in the bid-ask delta indicator.
In simpler terms, the current order book shows sellers exceeding buyers at this price point. Additionally, derivatives traders contributed to the decline.
Meanwhile, stability in open interest coupled with a substantial drop in volume indicates new short positions are being opened, adding downward pressure on the token.
“Expectations for the long term remain positive. Investors are seeking real workloads, genuine developer engagement, and ecosystem partnerships to support Monad’s high-throughput potential,” noted Shivam Thakral, CEO of Indian cryptocurrency exchange BuyUCoin. “Nevertheless, given the recent downturn, the market will probably look for hard evidence before reassessing the asset.”
This decline comes shortly after a network spoofing event that occurred just days post-launch.
Malicious users began faking token transfers on Monad, a tactic designed to create confusion and erode trust.
Monad’s CTO and co-founder, James Hunsaker, acknowledged the issue on Tuesday, cautioning users about transactions that appeared to be incorrectly sent from his wallet.
This sudden price drop is quite striking compared to the network’s performance metrics, which report nearly 150,000 active users and around 4.7 million on-chain transactions.
Simultaneously, transfers of stablecoins to layer 1 blockchains surged to $711 million following recent successes.
The disconnect between robust on-chain growth and weak price trends seems to be a recurring scenario in today’s market, with a general risk-averse sentiment putting pressure on the broader crypto landscape.
