SafeMoon, the token on Binance Smart Chain widely recognized as the Tiktok meme coin, is experiencing tremendous volatility following its massive gains over the past week.
According to the data from Dex.Guru, which tracks alternative cryptocurrencies on various blockchains, SafeMoon’s price has dropped nearly 50% from $ 0.0000074 to $ 0.0000045 in the past two days.
Does the SafeMoon rally have any power?
SafeMoon is a cryptocurrency on Binance Smart Chain that started with a low market cap of around $ 50,000. Safemoon’s price and market cap went parabolic after its growing popularity on TikTok.
On Dex.Guru, SafeMoon’s price rose from $ 0.00000029 to $ 0.0000074, up more than 2,200% in just three weeks.
Whether there is any substance or fundamental catalysts behind the SafeMoon rally remains to be seen.
On April 22, the SafeMoon team announced that the cryptocurrency is inundated with offers from major Asian exchanges.
The team said an exchange in Asia currently in talks with SafeMoon is the 36th largest in the world.
The team said:
“#SAFEMOON is currently inundated with exchange offers, a major Asian exchange to be announced soon … 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.”
Nevertheless, traders highlighted SafeMoon’s tremendous volatility despite its relatively high liquidity compared to other tokens not listed on the major exchanges.
Cantering Clark, a derivatives trader, said the SafeMoon correction is rebalancing the universe, implying that the rally was unsustainable.
Woke up to watch the universe restore balance.
Day Safemoon Players. pic.twitter.com/oUvlEd2JiS
– Cantering Clark (@CanteringClark) April 21, 2021
Luke Martin, a well-known cryptocurrency trader, also described SafeMoon’s price trend as “unSAFEMOON” after it dropped 65% in a short period of time on April 22.
– Luke Martin (@VentureCoinist) April 21, 2021
One reason why the rally could fade
SafeMoon rebounded sharply within a few weeks, shooting its peak from nearly zero to $ 5 billion in valuation.
Cryptocurrency researcher Larry Cermak noted that the SafeMoon live stream had 50,000 live viewers.
But Cermak also pointed out that if interest around Binance Smart Chain continues, BSC could struggle to meet rising user demand, which could in turn lead to higher fees that could drive users away.
DeBank says PancakeSwap had 700,000 unique addresses today and the SafeMoon livestream 50,000 live viewers. Wtf is underway. One thing I’m sure is BSC won’t be able to handle the current activity much longer and will eventually become unusable. Start losing money consistently, people also lose interest. The only question is what happens next. “
As Cointelegraph reported, PancakeSwap, the largest automated market maker on Binance Smart Chain, caught up with Ethereum user activity when demand skyrocketed at the height of the SafeMoon rally.