Crypto Exchange Tokens Suffered Worst During Elon Musk Dump

Yerevan (CoinChapter.com) – Centralized (CEX) and decentralized exchange (DEX) tokens plunged into a downward spiral after the recent crypto crisis partially initiated by Elon Musk, suffering more losses than other crypto sectors.

Musk’s decision to make a U-turn on Bitcoin (BTC) payments for Tesla electric vehicles initialed a bearish breakdown in Bitcoin price since May 13. Many smaller cryptos followed suit only to get an additional blow from the People’s Bank of China.

The central bank banned all crypto-associated activity in the country, triggering a second wave of sharp declines on May 19.

Read more: Bitcoin Price Recovery Cut Halfway as China Ban Worries Bulls

Digital Asset Exchanges In Crisis

The crypto crisis hit not only cryptocurrencies, their prices, and market caps but also exchanges and their tokens.

Exchanges are essential to the digital asset world. However, the traffic on the blockchains got too high during the crash on Wednesday, May 19. Thousands of traders were panic-selling their assets as the prices plummeted. Others rushed to ‘buy the dip,’ which caused major exchanges like Coinbase and Binance to experienced delays and report outages.

Binance was forced to disable Ethereum withdrawals temporarily because of network congestions. Coinbase called an ‘intermittent downtime‘ while it attempted to identify and repair the problem.

Read more: Bitcoin Exchanges Go Offline as Price Crashes to $30,000

Centralized Exchange Tokens Bearish

As exchanges struggled to accommodate the sudden surge in simultaneous transfers, their token prices suffered as well. Both CEX and DEX tokens recovered only partially as of the moment of writing.

Binance coin

BNB, the native token of Binance, plummeted by 30 percent in 24 hours on Wednesday from the initial $508 value. It partially recovered back to $383 in the London session Friday. Moreover, the technical indicator ‘death cross’ suggests a continuous bearish bias for BNB.

In hindsight, a death cross occurs when a short-term moving average wave crosses below a long-term moving average. In BNB, the 20-day exponential moving average (EMA-20: dark blue wave) dropped below the 50-day moving average (MA-50: red wave). If the prediction pans out, BNB could face further losses until the EMA-20 recovers back above the MA-50. The token price declined by 33 percent overall since the crisis initiated on May 13.

Huobi token

Huobi token (HT) also experienced a 25 percent loss on May 19 alone. The price went from $27.8 intraday Tuesday down to $20.6 on Wednesday, briefly dropping as low as $16.8. Huobi moderately regained value and traded at $23.8 in the European session Friday. The overall loss for HT since May 13 stood at 31 percent.

FTX token

FTX token (FTT) started May 19 with the value of $50.9 and declined by a 28 percent to $36.7 intraday value, briefly slumping to $32.7. FTT reclaimed a portion of its value and traded at 39.5 against the USD in Friday’s European session. Overall the FTX token dropped by 29% since May 13. Moreover, it faced a death cross on the 1D chart since Thursday, hinting at further bearish patterns ahead.

Decentralized Tokens Declined In Value

As CEX tokens fell in both price and market cap during the critical past week, DEX tokens also suffered losses and significantly declined in value.

Uniswap token

The Uniswap DEX had traders and investors on the edge of their seats as the crypto community waited for the blockchain to present its upgraded V3 protocol on May 5. However, the community found the V3 disappointing due to high fees and technical difficulties. Uniswap’s native token UNI has been exhibiting bearish bias ever since.

UNI dropped significantly during the past week, briefly bottoming down at $16.4 on Wednesday, from the intraday of $35.3 Tuesday. Overall the UNI token lost 31 percent in the past week and traded at $25.7 in the European session Friday. In addition to the protocol challenges, UNI also faced a death cross on Thursday.

Pancake Swap Token

Pancake swap token (CAKE), like the rest of the coins and tokens, had a tough week. It lost 41 percent on Wednesday but managed to retrieve the value partially, as it traded at $19.2 in the Friday London session. The overall loss for CAKE over the past week stood at 35 percent. Additionally, like many others listed above, the token faced an upcoming death cross on the daily chart.

Due to Elon Musk’s policy on Bitcoin payments and the conservative stance on cryptocurrencies from China’s Central Bank, the crisis on the market has been overwhelming. Since the crypto market went bearish, the large coins counted their losses and centralized and decentralized exchange tokens. The market took action to recover and regain value, as many crypto traders went in to ‘buy the dip’ instead of panic selling.

The crypto market as a whole is too unstable at the moment to make predictions. Some experts believe the current crisis is the ominous ”bursting bubble”. Others are united around the idea that the crisis is temporary after all.