Solayer (LAYER) is facing significant pressure following a sudden 45% drop that erased weeks of positive momentum. Previously soaring by 460% since February, the token is now trading below $1.70 as traders try to decipher the cause of the sharp decline. The altcoin lost around $350 million in market capitalization during this crash. The current market sentiment is split between those anticipating a rebound and those preparing for more downward movement, with the long/short ratio at 1.45.
The recent plummet in LAYER's value, losing nearly $350 million in market cap, has triggered concerns and inquiries about the reasons behind the sudden drop. Despite its promising fundamentals, such as being the first hardware-accelerated blockchain that aims for high processing speeds and bandwidth, the token has experienced a considerable decline, dropping from nearly $3.10 to $1.90 within 24 hours. Solayer offers practical value through its Solayer Emerald Card, enabling users to seamlessly use USDC via Visa, Apple Pay, and Google Pay.
The community is struggling to comprehend the significant drop in LAYER's value, especially after its exceptional performance earlier in the year. Speculations have emerged, attributing the crash to various factors like market makers' actions, alleged unethical practices by the founders, and the daily unlock of LAYER tokens. However, the daily token unlocks do not justify the extensive market cap loss. The upcoming substantial token unlock on May 11, releasing 26.5 million LAYER tokens worth approximately $51 million, could further escalate selling pressure if market sentiment does not improve.
The recent crash led to panic selling triggered by significant long liquidations, totaling $3.2 million, which surpassed short liquidations. This forced selling intensified the drop in LAYER's price, emphasizing the impact of leveraged positions unwinding. Despite a recent shift in the long/short ratio indicating a slight rebound sentiment, concerns about market depth remain, potentially leading to continued price volatility regardless of sentiment changes. Traders and investors are closely monitoring LAYER's price as it struggles to recover above $1.90 amid uncertainty regarding the cause of the crash and the upcoming token unlock on May 11. The current rise in long positions, while signaling optimism for a rebound, also poses a risk of additional liquidations if the token fails to recover, triggering further selling pressure.