ZKsync experiences a 21 decline following airdrop amidst ongoing selling pressure
ZKsync, the layer-2 blockchain platform built on Ethereum, has experienced a substantial 21% decline in the value of its token following a recent airdrop, leading to a surge in selling pressure.
The highly anticipated distribution of “ZK” tokens initially positioned the asset’s market capitalization close to an impressive $900 million, according to market data. However, the initial fervor was short-lived as the token’s value dropped by 21% and 26% from its peak of $0.3098.
On Jun. 17, amidst initial controversy, the ZKsync team carried out the token airdrop, which was quickly followed by Binance announcing the token’s listing. This move provided a platform with sufficient liquidity for trading.
At the time of writing, ZKsync is facing a 21.76% dip over the last 24 hours, with the token trading at $0.2245. Trading volume has surged by 1,970% to $1.3 billion in the past 24 hours, indicating heightened trading activity. The current market cap of the token stands at $811 million.
This decrease in value is attributed to the immediate selling off of tokens by airdrop receivers, a trend commonly observed in the cryptocurrency market where beneficiaries swiftly sell off their holdings to capitalize on quick profits. This rush to sell, particularly with ample liquidity on platforms like Binance, has exerted significant downward pressure on the token’s price.
Similar patterns were seen with Notcoin (NOT) following its airdrop the previous month. NOT experienced a nearly 40% decline just a week after the airdrop due to a surge in selling pressure. Notably, the token has since recovered, showing a 134% increase over the past month.
While nearly half of the ZK tokens were claimed shortly after the airdrop began, concerns persist regarding the platform’s technical challenges and the possibility of Sybil attacks, where a single user creates multiple accounts to receive additional tokens, which have cast shadows over the event.
Initially, the crypto community responded with enthusiasm, with early pricing on perpetual exchange Aevo valuing ZK at $0.67 at one point, suggesting an airdrop’s fully diluted value (FDV) exceeding $2.41 billion. However, this positivity quickly shifted as selling pressure became dominant.
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