Last night, the altcoin cryptocurrency known as Matic was the talk of the crypto community, as the asset had spent the week going on a circa-2017 Bitcoin-like parabolic run, only to drop over 70% in less than an hour, destroying investors who got caught up in price action.
This recent pump and dump is a hard-hitting reminder of how even the most incredible dream-like gains in the crypto world, can quickly turn into nightmares for others, just days or even minutes later.
Matic Pumps 180% in Two Weeks, Dumps 70% in One Hour
Matic kicked off 2019 strong. It was among the batch of Binance launchpad initial exchange offering tokens that were privy to extreme hype and early launch pumps. Due to how well-received the altcoin was immediately out the gate, many believed it – along with other IEO coins and a few others – would be among the top-performing assets in the next bull market.
Related Reading | Crypto Analyst: IEO Tokens Matic, Harmony One, More to Bring 1000x Returns to Holders
But eventually, Bitcoin’s 2019 rally and the unfortunate timing of Binance shunning US investors from its flagship trading platform, it caused many altcoins like Matic to return to a slow simmer.
Crypto. The stuff of dreams and nightmares. $MATIC was up 180% in two weeks before crashing 70% in an hour. pic.twitter.com/zo9LzP80L8
— Alex Krüger (@krugermacro) December 10, 2019
That simmer boiled over this past month, and Matic went on a parabolic rally, resulting in over 180% return for investors in just two week’s time. Irrational exuberance took hold of investors who began to FOMO into the crypto asset, hoping to strike it rich and make up for gains lost during the ongoing crypto winter.
And just like Bitcoin or any asset that gets overheated too fast, a massive, violent sell-off ensued, wiping out as much as 71% of Matic gains in just a couple of hours.
The dump, according to analysts, was a “domino effect” of staggering stop loss orders in a highly volatile and illiquid asset.
https://twitter.com/canteringclark/status/1204265000250023936?s=12
Crypto Traders Remind Investors Not To FOMO
As many crypto analysts have pointed out, 180% gains in two weeks is the type of dream-come-true investment that could leave someone set for life. However, a 71% drop in minutes could just as easily turn someone’s dreams into a nightmare, losing a fortune at the hands of the ferocious selloff.
Some have taken the opportunity to issue a reminder that its never wise to FOMO into an asset that’s already taken off, as it could leave late buyers burned as early investors begin to take profits, and the market begins to correct.
Related Reading | Accurate Trader Calls For $1K Bitcoin and Destruction of Crypto Industry
Whether this harms the long-term outlook for Matic remains to be seen, but at the very least, investors may be hesitant to FOMO into the asset moving forward, in fear of being sold into the moment the rally peaks.
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