Plasma (XPL) price has declined over 11% recently despite a positive broader crypto market, driven by upcoming token unlocks, reduced on-chain activity, and falling stablecoin TVL. This has weakened the token’s short-term momentum, with further downside risks to $0.15 if bearish trends persist.
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Upcoming unlocks: 88.88 million XPL tokens worth $18.13 million set to release on November 25, pressuring prices downward.
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On-chain activity is collapsing, with DEX volume dropping from $47.81 million to $8.39 million since late November.
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Stablecoin TVL fell 68% since October to $1.82 billion, contributing to overall TVL decline to $6.695 billion and signaling reduced network traction.
Discover why Plasma XPL price is sliding in a green market due to unlocks and fading activity. Stay informed on crypto trends and prepare your strategy today.
What is causing Plasma XPL price to decline despite the green market?
Plasma XPL price has experienced a sharp drop of more than 11% in recent hours, bucking the broader market’s upward trend. This downturn follows the fade of initial post-launch hype, including an airdrop of around 10,000 XPL to early users, which had briefly supported gains. Key factors include an impending token unlock and diminishing on-chain metrics, eroding the token’s foundational strength.
How are upcoming unlocks and on-chain metrics impacting XPL’s performance?
The primary trigger for the Plasma XPL price decline is the scheduled unlock of 88.88 million XPL tokens on November 25, valued at approximately $18.13 million. This event represents the largest among roughly $80 million in sector-wide weekly unlocks, with over 80% of XPL’s supply remaining locked thereafter. Data from DefiLlama indicates this influx could intensify selling pressure, especially as long-term adoption shows signs of stalling.
Stablecoin total value locked (TVL) has plummeted 68% since October, marking an 8.24% weekly decrease to $1.82 billion in market cap. Overall network TVL stands at $6.695 billion, bolstered mainly by $5.79 billion in bridges, per Dune analytics. These figures highlight a contraction in liquidity and user engagement.
Source: DefiLlama
Source: Dune
On-chain signals further underscore the fading momentum. Cumulative transactions reached a new high, yet daily transaction counts decreased from 42,398 to 39,725. Daily new users numbered just 137, with 1,831 returning users. DEX volume has significantly retreated to $8.39 million from a peak of $47.81 million on November 19. These trends, evident since late October, correlate directly with the Plasma XPL price decline, as reported by on-chain analytics platforms.
Frequently Asked Questions
What factors are contributing to the Plasma XPL token unlock pressure?
The unlock of 88.88 million XPL tokens on November 25, worth $18.13 million, is a major factor. As the largest weekly unlock in the sector at around $80 million total, it increases circulating supply and invites selling, particularly after post-airdrop hype has subsided, per data from token vesting trackers.
How does declining on-chain activity affect Plasma’s market position?
Declining on-chain activity, including a 68% drop in stablecoin TVL since October and reduced DEX volume to $8.39 million, signals weakening user engagement and liquidity. This mirrors the broader Plasma XPL price decline, making the token vulnerable to further bearish moves unless activity rebounds, as observed in network analytics.
Key Takeaways
- Token Unlocks as a Catalyst: The November 25 unlock of 88.88 million XPL adds supply pressure, potentially driving prices lower in the short term amid already fading hype.
- On-Chain Weakness: Metrics like falling DEX volume from $47.81 million to $8.39 million and reduced daily users indicate declining momentum, aligning with a 36% price drop over five days.
- Bearish Technical Outlook: Trading in a downtrend channel with negative net volume of $5.07 million points to $0.15 as the next support level, unless resistance breaks upward.
Source: TradingView
Conclusion
In summary, the Plasma XPL price decline amid a green market stems from token unlocks, waning on-chain activity, and bearish technical indicators, as evidenced by data from DefiLlama, Dune, and TradingView. While cumulative transactions show some progress, daily metrics and TVL reductions paint a cautious picture. Investors should monitor upcoming unlocks and activity trends closely, positioning for potential recovery or further dips in this volatile landscape.
