PONS down 10% as whales sell $3.6M – Can its price bounce from $0.55?
Examining why PONS was down by double-digits in the past 24 hours.
Pons [PONS] has been down more than 10% in the past 24 hours, turning its positive weekly gains to negative. This decline follows the broader crypto market taking a break from the ongoing uptrend that started in August.
However, whale selling and a sharp decrease in network activity are accelerating the loss in the launchpad’s token.
Why is the value of PONS declining?
Getting into the details, a whale sold about 5.34 million PONS for 1,315 Ethereum [ETH] worth $3.60 million, taking a loss of $578K. The selling activity was executed on batches of 500K tokens on Uniswap [UNI] and KyberSwap DEXs.
Still, the whale holds Cash Cat [CASHCAT] and 4STOCK, which are all in drawdown.
As such, the capital flight from PONS showed that some whales were rotating to more stable tokens like Ethereum.
Additionally, the launchpad’s network activity was declining, as seen in the fees generated.
The revenue dropped sharply from a peak of $11.24 million in early September to $2.37 million at the moment. This was equivalent to a 5x decrease in 19 days. Usually, fees stay high when the network is congested and vice versa.
As a result, the low revenue has reduced the token’s burn rate.
In the past 24 hours, only 440K PONS were permanently removed from circulation. This represents 0.044% of the total supply, down from more than 1 million tokens burned the previous day.
Can PONS bounce off the $0.55 support?
On the charts, PONS was trading in a huge triangle pattern, with the price rejecting the slanting trendline each time. PONS is likely headed to the $0.55 support zone, which prevented a breakdown over the past two weeks.
This downtrend is aligning with PONS decoupling from Robinhood [HOOD], as the Correlation Coefficient indicator is down to 0.38. This indicates PONS is no longer benefiting from the hype around Robinhood Chain.
However, the RSI divergence has flipped bullish, but its reading at 47 is still below the neutral level. This reading suggests that bears have yet to exhaust their selling pressure, leaving room for further downside.
Based on the historical data from the past two weeks, the token is likely to surge from $0.55. Only a break past the triangle pattern would expose the $1 mark. On the contrary, losing the support at $0.55 increases downside risk to $0.34-$0.37.
Final Summary
- PONS declined by 10% in the past 24 hours amid whale selling and a sharp decline in network activity.
- PONS was trading toward the $0.55 support with a bullish target at $0.95, while the bearish one was at $0.37.
