The TOWNS market recorded a sharp decline as whales and retail investors sold off simultaneously, with prices dropping more than 50% in just a few days.
On-chain developments, futures contract data, and market sentiment all indicate that there are still many downside risks for the TOWNS Token in the short term.
MAIN CONTENT
The price of TOWNS dropped more than 50% as whales transferred Tokens to exchanges and sold heavily.
Retail investors collectively sold off, and the selling pressure overwhelmed the market.
Futures contract data reflects continued expectations of price decline, and investors should exercise caution.
What is TOWNS crypto and how has its price developed recently?
TOWNS is a cryptocurrency Token that has undergone significant volatility recently, recording a historic price drop to unprecedented lows.
This Token has dropped 50.79% from the ATH of 0.088 USD to the low of 0.035 USD before slightly recovering to the 0.039 USD area at the time of the survey. According to market data, this is one of the largest drops since TOWNS was listed.
The market capitalization of TOWNS also plummeted from 163 million USD to only 86.3 million USD in a few days, leading to a noticeable capital withdrawal from both whales and retail investors.
TOWNS was affected by a strong sell-off wave from whales and investors after a short-term price increase, leading to a halving of its market capitalization in a short time.
AMBCrypto, Analysis on 6/8/2025, Source: Nansen
What caused the sharp collapse of TOWNS's price?
The main cause originates from the sell-off activities of whales right after a strong price increase, leading to a sudden spike in selling pressure on exchanges.
After TOWNS recovered to the 0.08 USD region on 4/8, large wallets increased their accumulation by an additional 3.13 billion Tokens, raising total holdings to 10.21 billion, an increase of 61%. However, as soon as the price peaked, they immediately transferred Tokens to exchanges to exit and lock in profits. The influx of Tokens to exchanges from large wallets surged to 525.05 million Tokens, equivalent to an increase of 2.6 billion %, while the amount withdrawn was only 8 million Tokens.
This pattern shows that whales took the opportunity to sell into the buying pressure, causing prices to plummet sharply in a short time.
Source: Nansen
The influx of Tokens from whale wallets to exchanges is an early warning sign of the risk of sell-offs and negative price fluctuations in the market.
Nansen Report 8/2025
Why are whales dumping TOWNS in large quantities?
Whales often take advantage of strong price increases to lock in profits, minimizing holding risks when the market shows signs of strong corrections or liquidity withdrawal.
Statistics from Nansen show that large holders accumulated during the accumulation phase, then intensified their Token transfer activities to exchanges just when the market was in FOMO, creating extreme selling pressure, especially when retail investors had not yet reacted.
This action creates a domino effect, causing prices to collapse quickly due to a large number of Tokens being floated on exchanges and demand not being sufficient to absorb it.
Source: Nansen
How do retail investors react to TOWNS price fluctuations?
Immediately after detecting signals of whales dumping, retail investors also rushed to sell off, creating selling pressure on the spot market.
On the two days of 5 and 6/8, Coinalyze recorded a total selling volume on the spot market exceeding 2 billion Tokens, mainly traded through major exchanges like Binance and Coinbase. Net Buy/Sell Delta was negative for two consecutive days, at -42 million and -11 million Tokens respectively.
This reflects the flight mentality, primarily cutting losses of retail investors when they perceive that price prospects are no longer positive, while the fear of capital loss increases due to the emergence of a chain selling.
Source: Coinalyze
The consensus to sell off among whales and retail investors is a major driving force pushing prices down unusually deep and leading to a surge in trading volume on major exchanges.
Coinalyze Analysis 8/2025
How does the selling pressure from retail investors affect the market?
When the number of sell orders from retail investors increases, the price of TOWNS quickly breaks below the strong support zone, forcing previous buyers to sell at increasing risk.
In the cryptocurrency market, this phenomenon often leads to a wave of chain sell-offs, eroding the confidence of medium to long-term holders, while attracting short-selling speculative forces in the derivatives market to exploit the downward trend.
Excessive selling pressure makes it difficult for the market to create a solid bottom immediately, especially when liquidity shows signs of depletion and buying pressure is weak.
What does futures contract data reflect about the market sentiment for TOWNS?
A series of futures contract indicators in a negative state show that most traders expect prices to continue to decline, not only in the short term but also in the medium term.
According to Coinalyze, Open Interest decreased from 12.6 million USD to 10.93 million USD indicating weakening speculative demand and market participation. The Long/Short Ratio also dropped to 0.88 with 53% of positions being short, meaning most traders are betting on a downward trend.
Source: Coinalyze
How does the funding rate reflect the sentiment leaning towards short selling?
Funding rate is an important indicator measuring the balance between buyers and sellers in the perpetual contract market. When the funding rate is negative, investors holding short positions have to pay fees to holders of long positions, often reflecting a pessimistic sentiment and overwhelming selling pressure.
The funding rate for TOWNS remains at -0.0240, and the projected funding rate is also negative at -0.0227. This indicates that traders are willing to pay fees to continue betting on lower prices, reinforcing the outlook that the market will not recover soon.
Source: Coinalyze
A persistently negative funding rate can continue to drive the sell-off effect as traders are reluctant to hold long positions. The market often becomes more sensitive to sudden price drops.
AMBCrypto summarizes Coinalyze data, 8/2025
Is TOWNS at risk of continuing to decline or will it recover soon?
Technical analysis and on-chain data both indicate that the risk of a price decline remains high as the market has not established a solid support base, while selling pressure is dominating.
If selling pressure does not decrease, it is likely that TOWNS will continue to drop to the 0.034 USD region – a new low. However, if buyers unexpectedly come in strongly and push back against the selling pressure, the Token could recover to the 0.046 USD mark, but the chances for a strong increase remain very limited as speculative signals do not currently support an upward trend.
Source: TradingView
What is the major lesson from the TOWNS crash event?
The TOWNS collapse event raises a lesson about the risks of holding Tokens with low liquidity, concentrated capital allocation, and susceptibility to price manipulation. Sudden actions from whales can easily trigger a domino effect, especially in periods dominated by market emotions and lack of transparent information.
This situation indicates that investors should actively monitor on-chain indicators, trading volume, and whale behavior to make early decisions, avoiding getting stuck when the market suddenly turns bad.
What factors should investors monitor when trading new Tokens like TOWNS?
When trading new Tokens or low-cap Tokens, investors need to closely monitor whale money flows, volume fluctuations, changes in the number of large holders, futures contract funding rates, and the status of Unstaking/Depositing on exchanges.
In addition, caution should be exercised with unusual strong price increases accompanied by large Token inflows to exchanges. Over-reliance on news, FOMO effects, or unfounded expectations will increase the risk of rapid capital loss.
Cryptocurrency investors should prioritize risk management, diversify their portfolios, and focus on high liquidity assets and transparent projects rather than chasing temporary trends.
Advice from CoinMarketCap, 2025
The TOWNS event compared to other notable ‘dumps’: A look back at market impact
The TOWNS event is not an isolated case. In periods of strong market volatility like LUNA, FTT, or meme coins, there are often signs of whales or teams implementing large-scale sell-off strategies, causing immediate price pressure and creating widespread FUD sentiment.
Token/Exchange Main Agent Amount Sold Time of Sharp Drop Market Reaction LUNA Founder/whale Billions of USD 5 days Sell-off, ecosystem collapse FTT FTX, Alameda Hundreds of millions of USD 3 days Panic sell across the market TOWNS Whale/retail investor 3.13 billion Tokens 2-3 days Triggered chain reaction sell-off
The comparison table helps investors visualize the scale and impact of the sell-off effect when whales act simultaneously.
Summary: Potential risks and recommended defensive strategies
The TOWNS event shows that market risks can occur at any time, especially with Tokens lacking a solid foundation. According to experts, it is crucial to always prioritize risk control, build appropriate strategies instead of following the crowd mentality or having unrealistic expectations for newly listed Tokens.
Investors need to enhance their skills in reading on-chain data, identifying whale behavior, and limiting the use of high leverage in high volatility markets. Utilizing multi-channel information and prioritizing official reporting sources will help make accurate decisions and reduce the risk of uncontrolled losses.
Frequently Asked Questions
How much has the price of TOWNS dropped compared to the most recent peak?
TOWNS dropped 50.79% from the peak of 0.088 USD to the lowest level of 0.035 USD during the recent sell-off, based on TradingView data.
Who are the main agents causing the TOWNS sell-off?
Whales and large holders of TOWNS have transferred Tokens to exchanges to sell off, combined with retail investors collectively cutting losses, creating a chain reaction sell-off effect.
What was the trading volume on exchanges during this period?
Selling volume exceeded 2 billion Tokens on major exchanges like Binance and Coinbase within two days, according to Coinalyze.
What does the futures contract data of TOWNS reflect?
Pessimistic sentiment dominates with over 53% of positions being short, the consistently negative funding rate and sharply declining open interest reflect expectations of continued downward trends.
Can the Token recover if buying pressure returns?
If strong buying suddenly appears, TOWNS may recover to the 0.046 USD region, however, this outlook is not currently supported by trading data.
What lessons can investors learn from this event?
Investors should focus on risk management, regularly monitor whale behavior, and diversify their portfolios to minimize the risk of losses from sudden price drops.
Should leverage be used in this period of high volatility?
High leverage should not be used during large volatility, as the risk of liquidation and loss increases sharply if prices continue to drop without timely support.
Source: https://tintucbitcoin.com/towns-giam-manh-nguyen-nhan-do-dau/
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