The Solayer (LAYER) token has seen a notable drop from its peak of ≈ $3.41 in early May to around $0.65 now, representing a decline of about 80%. Here’s a detailed analysis of the main reasons:
⚙️ 1. Large token unlock
On May 11, nearly 13% of the total supply (about 27 million tokens) was unlocked, leading to increased selling pressure.
Investor fears about the impact of this drove them to sell before the launch, increasing pressure on the price.
🐋 2. Selling activity from 'whales' and market coordination
A collective selling activity from major investors has been observed, along with opening short positions in the futures market, which increased pressure and caused a collective liquidation of long positions.
The negative funding rate in futures contracts is indicative of coordinated behavior from selling pressure.
📉 3. Clear technical collapse
Breaking through a rising channel linked to previous peaks and bearish formations like RSI pointing downward, with negative crossovers in MACD, has increased expectations of price decline towards lower support levels, such as $1.25 or even ~ $0.65.
🌐 4. Broader impact on the cryptocurrency market
A comprehensive market downturn, especially in the Layer-2 category and meme tokens, due to Bitcoin's drop from $111k to $105k, led to risk-off behavior and negative implications for SOLAYER.
Geopolitical tensions (such as escalating tensions in the Middle East) have pushed investors away from high-risk assets.
🔄 Summary of the impact and future propositions
The token unlock was the initial spark, followed by sell-offs from whales and a turbulent market technique.
The technical price structure supported the established bearish scenario.
The overall sentiment in the cryptocurrency market and the global environment has increased pressure.
🔍 What to watch for now:
Will the price reach the support bottom at ± $0.65? And does it form a rebound?
Liquidity level and balance between supply and demand after the token unlock period has ended.
Updates from the project team or indicators of network activity, such as transaction volume and Dev activity.
Bitcoin movements and the overall market as key drivers for future direction.
🧭 Preliminary recommendations
If you are a short-term trader: Watch the mentioned support areas and RSI/MACD pivot points.
For long-term investors: Ensure the transparency of the project team and the distribution of tokens before making any additional decisions.
LAYER can also be compared with competing Layer-2 projects or tokens with more balanced distribution models.