The crypto market has been in dire straits for a while. Almost all coins have been shedding value, and red has been the theme of late. Amidst the crypto crash, however, a particular coin managed to grab the eyes of people from space. Initially, its movements were in sync with that of the broader market’s trend, but by midday, it started treading on the complete opposite path.
Outlining the crypto’s movements
As such, the coin in question is cloud blockchain infrastructure protocol Chain’s XCN. On Huobi, in a span of merely 3 hours, the XCN ended up shedding almost 99% of its value by dipping from $0.126 to $0.00125. Post that, it did consolidate there for a while, but quickly registered a long green candle right after.
In the subsequent hour, it managed to attain $0.1 again, making its pump mount to approximately 2800% [2772%, to be precise]. After briefly hiccuping for a while, at press time, things seemed to be on track for the crypto, for the hourly candle in the making was in green and indicators like the RSI flashed a decent, above-average reading of 51.
What triggered the swing?
On seeing a 90%+ plummet, people from the space these days have started equating random coins with LUNA. Yesterday, it was Celsius, today it’s Chain.
As far as XCN is concerned, CEO Deepak Thapliyal took Twitter to speculate that the price action could perhaps be a result of a margin call on XCN markets.
Now, a margin call usually occurs when the value of an investor’s margin account falls below the broker’s required amount. During such situations, investors are demanded to direct additional funds into the account to bring up the value to the maintenance margin. Typically whenever the amount involved is large, asset price fluctuations are almost inevitable.
Thapliyal further clarified that the Chain team was working with exchanges and their market makers to identify what exactly went wrong where. He further added that a full post-mortem on the incident would be published soon.
Alongside, exchanges like KuCoin temporarily closed deposit services of Chain tokens. Their official update on the same noted,
“Due to the network maintenance, we have decided to suspend the deposit service for Chain (XCN) tokens.“
Follow-ups concerning the same would be announced separately by the exchange.