Recently, the token $LOOM launched by Loom Network has attracted widespread attention from the market, especially behind its violent price fluctuations, which seem to hide some unknown manipulation factors. This article will delve into the rise and fall of the LOOM token, revealing the man behind it and the impact this phenomenon may have on investors.
The Rapid Rise of LOOM Token
On the 13th of this month, on-chain analyst Lookonchain monitored that a wallet address related to the Upbit exchange purchased 21.42 million LOOM tokens, with a transaction amount of approximately US$5.83 million. It is worth noting that this wallet address already held nearly 653 million LOOM before the transaction, worth approximately US$181 million, accounting for 50% of the total supply. This huge purchase directly caused the price of LOOM tokens to rise rapidly, with an increase of nearly 30%. On the 15th, LOOM tokens surged 42% again, once exceeding $0.4, setting a new high since May 2018, with an increase of more than 120% during the period.
This sharp increase in price is obviously closely related to the huge holdings of wallet addresses related to Upbit. As the market paid more attention to LOOM, investors poured in, causing an imbalance between supply and demand and further pushing up the price of the token.
The reduction of holdings of LOOM tokens
However, as the LOOM token hit a new high in the past six years, Lookonchain monitored that wallet addresses related to Upbit had transferred approximately 36 million LOOM. At this time, the wallet address still holds 61.7 million LOOM, worth approximately US$283 million, accounting for 47.5% of the total supply. This reduction of holdings caused uneasiness in the market, and investors began to worry about the future trend of LOOM tokens.
Over the next two days, the price of the LOOM token plummeted by as much as 35%. According to data from CoinGecko, the LOOM token fell from a high of $0.41 to a low of $0.27 in just 2 days, finally temporarily trading at $0.2769. This wild swing has confused many investors.
frequent capital flows
Further monitoring showed that addresses related to Upbit frequently deposited LOOM tokens into exchanges such as Binance and Bithumb in the past 48 hours, with a total of more than 120 transactions and the transfer of approximately 19 million LOOM tokens, worth approximately US$6.76 million. . This rapid flow of funds indicates that Upbit-related addresses are actively transferring LOOM tokens to other exchanges, seemingly preparing for further reductions.
This frequent trading behavior not only arouses market attention, but also makes people full of doubts about the future of LOOM tokens. Investors began to think about what caused these wallet addresses holding a large number of LOOM tokens to choose to reduce their holdings? Is it panic in the market, or is there deeper manipulation hidden behind it?
Investors’ response strategies
Facing the violent fluctuations of LOOM tokens, investors need to remain calm and rationally analyze market dynamics. First, it is crucial to understand the fundamentals and market trends of the LOOM token. Secondly, investors should pay close attention to the movements of wallet addresses related to Upbit and adjust their investment strategies in a timely manner.
In addition, it is recommended that investors conduct sufficient market research and analysis before making any investment decisions to avoid emotional decisions caused by market fluctuations. Investors may also consider diversifying their investments to reduce risk.
Conclusion
Behind the rise and fall of LOOM tokens, complex market dynamics and capital flows are hidden. While the recent volatility is confusing, with deeper analysis we can better understand the phenomenon. In the future, whether the LOOM token can develop stably still needs to pay attention to market changes and the trends of holders.
In this market full of uncertainty, staying vigilant and investing rationally will be the attitude that every investor should have. I hope this article can provide you with some valuable reference in your investment decisions in LOOM tokens.