Despite the volume increase from external factors, what’s holding DEGEN back from a full surge?
- DEGEN crypto topped the week as a leading gainer, soaring 127% after the Coinbase listing. However, a key resistance factor dampened the hype.
Degen [DEGEN] has seen significant fluctuations following its listing on Coinbase, which initially sparked a buying frenzy, resulting in a remarkable 127% surge shortly after.
However, the excitement appears to have tapered off, with DEGEN priced at $0.007389 at press time, reflecting a 7% drop in the last 24 hours.
This decline raises doubts about whether the initial hype has faded, or if there is potential for resurgence.
DEGEN crypto faces retracement
DEGEN, a memecoin on Coinbase’s L2 network Base, surged in price and volume after being added to the exchange’s listing roadmap.
The token jumped 127% from $0.004 to $0.009, with trading volume rising from $8.5M to $89M.
However, this rally was short-lived, leaving many stakeholders in a net loss position. Approximately 23K addresses now hold about $3.7B in DEGEN at a loss, with FOMO keeping them engaged as they hope for a price reversal.
Source : IntoTheBlock
Meanwhile, if bulls fail to maintain support at $0.007, approximately $2B in DEGEN could be at risk of liquidation, as investors may rush to break even against their acquisition price of $0.006.
Typically, memecoins like DEGEN boost on chain activity, benefiting Coinbase through transaction fees.
Simply put, as users trade DEGEN, the volume generates revenue for Coinbase, making the inclusion of such tokens on their platform strategically advantageous.
However, despite the initial spike, bulls failed to flip the $0.009 resistance into support amid ongoing volatility.
If they had succeeded, a surge past $0.009 could have brought DEGEN back to mid-June levels, which it hasn’t retested since.
Can it achieve that this time?
If these conditions align
Interestingly, for a memecoin, maintaining community hype often hinges on routine developmental activities, providing investors with something to anticipate.
For DEGEN, a notable surge in development has coincided with a price spike, reaching as high as $0.03 in April, while trading volume soared to $130 million.
Source : Santiment
This marked the last significant activity before a dramatic decline over the months, until the recent listing revived the lost hype.
In addition to routine developments, monitoring large holders – especially whales who make up 63% of the large holder cohort – remains crucial, as they control 28.08B DEGEN tokens.
Interestingly, the listing didn’t deter large holders from seizing the opportunity; throughout September, they deposited millions of DEGEN into exchanges, preventing a price reversal.
However, on the day of the listing alone, they executed a stunning withdrawal of 388 million tokens.
Source : IntoTheBlock
Yet, their support was short-lived, as they subsequently sold 15M of their holdings into the exchanges, triggering a dramatic plunge.
Is your portfolio green? Check out the DEGEN Profit Calculator
If this trend holds, a pullback from the current $0.007 support could lead to significant liquidations, with $2 billion worth of DEGEN crypto at risk.
Therefore, shifting control from large to long-term holders is essential. Otherwise, centralized control will hinder DEGEN’s potential for a bull rally, regardless of listings or development projects.
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