Over the last weekend, SafeMoon grabbed the attention of crypto investors and enthusiasts after it gained over 99%. On April 20, the token quickly rose to its highest level settling at an exchange price of $0.000013, according to data from CoinMarketCap.
The DeFi token was founded by John Mating with the aim to circumvent bank lending and establish a peer-to-peer network. Since its launch, the token has been the talk of the crypto community as it rewards investors who buy and hold it.
It’s a cryptocurrency on the Binance Smart Chain that started out at a low market cap of around $50,000. The price and market capitalization of SafeMoon went parabolic after growing popularity on TikTok.
In merely three weeks, the coin grew 2,200%. Before it didn’t.
A Seismic Crash
The parabolic rally quickly came to a drastic end on Thursday morning when the digital token lost a shocking amount of value. The token lost about two-thirds of its market value in just an hour, dropping from a whopping $0.000015 to $0.000005.
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Pseudonymous crypto analyst, The Cryptonomist, noted the fall on Twitter:
The state of $SAFEMOON ? pic.twitter.com/0F1uYKbD0B
— The Cryptomist (@Thecryptomist) April 22, 2021
The team behind SafeMoon appeared to acknowledge the massive plunge. The protocol’s official Twitter account wrote: “Who said there wouldn’t be turbulence,” adding that investors should continue holding. Many investors seemed to be positive in the comments, sending a propelling rocket to infer sentiment to continue to hold.
The SafeMoon price has since recovered slightly to trade at $0.00000504 per data from CoinMarketCap.
This definitely doesn't look safe for liftoff | Source: SAFEMOONBNB on TradingView.com
Doge Rival Or UnSafeMoon?
Traders have emphasized the massive volatility of SafeMoon despite relatively higher liquidity compared to other tokens that are not listed on major exchanges. Like DOGE, the newly launched token, which boasts a fully diluted market cap of $4.3 billion, hopes to drive its value “to the moon.”
Sweet to the ears, the SafeMoon team announced earlier that Asian exchanges were asking to list the protocol on their platforms. The team said:
“SAFEMOON is currently inundated with exchange offers, a large Asian exchange is imminently being announced… this will allow Asian communities to acquire Safemoon, the exchange has $857 MILLION 24 hour trading volume and is the 36th LARGEST in the world.”
The emphasis on SafeMoon not being able to sustain a bull rally has been echoed by many analysts.
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Luke Martin, a well known cryptocurrency trader, also described the price trend of the token as “unSAFEMOON” after it dropped 65% in a short period on April 22.
— Luke Martin (@VentureCoinist) April 21, 2021
In fact many financial analysts have cautioned against buying the coin. Saying that the unsustainability of the bull rally will cause the token to fall massively on exchanges.
Laith Khalaf, a financial analyst at investment firm AJ Bell, cautioned crypto users looking to buy the newly launched token that it could be a risky bet. He noted that the push to buy is coming from speculative traders who are hoping to cash in on price surges rather than using the coin as a means of exchange.
For now, it’s unclear whether SafeMoon is really safe or it’s a pyramid scheme masking as a token. However, like all digital assets, inherent risks abound.
Featured image from Pixabay, Charts from TradingView.com