TREE fell by 8.5% in 24 hours due to airdrop sell-offs, negative sentiment in derivatives, and the failure of a technical recovery after reaching $500 million in total value locked.
Airdrop openings led to profits for early beneficiaries.
Negative funding rates indicated short-term bearish bets.
The cup and handle pattern failed at the $0.60 resistance.
Dive
1. Main catalyst: Airdrop sell pressure
The circulating supply of the TREE token increased to 156 million tokens (15.6% of the total) at its launch on July 29, with 12.5 million tokens distributed through Binance's HODLer airdrop.
Beneficiaries sold the released tokens after listing, following patterns similar to what happened with RCADE (-30%) and others. The token collapsed by 41% within 24 hours of its appearance, setting a negative tone.
2. Supporting factors: Derivatives sentiment
Weighted funding rates turned negative on August 1, indicating that traders were incentivized to short the TREE token (Crypto.News).
Open interest data (not provided) likely declined as the price fell, reflecting a reduction in bullish leverage.
3. Technical context: Recovery failure
TREE rebounded by 30% to $0.6068 on August 1 after hitting a weekly low of $0.4695, aligning with a 50% Fibonacci retracement level.
A cup and handle pattern formed, but the rejection at $0.60 (the high on July 30) canceled the upward momentum. The current price ($0.446) is 26% below this key level.
4. Market dynamics: Growth of total value locked versus volatility
While the total value locked in Treehouse exceeded $500 million (up 185% since April), the recovery driven by milestones was offset by opposing macro winds:
The cryptocurrency fear/greed index is at 48 (neutral), down from 64 (greed) last week.
The altcoin season index is at 39, indicating weak risk appetite for new tokens.
Conclusion
The decline of TREE reflects traditional volatility after listing, amplified by negative sentiment in derivatives and profit-taking by airdrop beneficiaries. Watch to see if support levels at $0.4695 hold and if the demand for storage at 50-75% annual yield will offset selling pressure.
Can TREE stabilize if fixed income interest attracts long-term holders despite short-term disruptions?