XPL FUD has recently been a focus of attention as token prices have dropped by more than 46% from their all-time high (ATH) in just a few days.
The cause is due to rumors, pressure to earn profits from ICOs, and unstable market sentiment. The key question now is whether this is just a short-term fix or is it a sign of a long-term downtrend?
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Plasma FUD spreads amidst information distortion
Beincrypto data shows that Plasma’s XPL price is a trade of around $0.9235, down 46% from the ATH three days ago.
The sudden decline of XPL comes from the claim that it was “developed by the same team as Blast,” a highly controversial project. Since its launch in late 2023, BLAST has faced many incidents, including hacking, lag pull, network outages, lack of development transparency, and intense debate over token distribution and airdrops.
As a result, XPL prices fell from $1.7 to $0.9 before recovering to current levels. However, some analysts have confirmed that this is simply unfounded and spreading to create artificial sales pressure even in organized FUDs. This highlights an important reality. The crypto market is driven by supply and demand and is extremely vulnerable to unilateral information manipulation.
“After deep research and my personal connections with Bitfinex, this has been confirmed to be a FUD with zero evidence organized,” commented One X user.
Aside from FUD on teams, another reason is unlocking ICO tokens. Many early investors have been making 20 to 30 times more profitable in just a few months. This led to a sudden surge in market supply, which contributed to a decline in prices.
Crypto trader Alex Kruger combines an extraordinary funding rate with large sales volumes, indicating that the decline is primarily due to “spot dumping” rather than shorter apertures. This is a feature of the market revised after the hot gathering, not necessarily due to fundamental changes.
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“As soon as sales of indiscriminate spots subside, expect a strong move that may always be,” analysts said.
Technical perspective: Clear signal from the chart
FUD-related information about XPL appears to have had a major impact on investors’ sentiment.
On the hourly chart, XPL displayed typical patterns of newly launched tokens. It follows a sharp dump. The ~$1.11 zone is a key level of support to regain short-term momentum.
During the four-hour period, the market witnessed a series of consecutive red candles. Some analyses suggest that XPL loses its 4H trend, breaks past the integrated zone, weakening the bullish structure without showing any attempts to recover.
XPL FUD has played a major role in promoting this pessimistic sentiment.
Big question now: is this the bottom of the local area or is it the beginning of a long-term downtrend? From a strategic perspective, this is likely a short-term bottom. Prices could rebound as ICO sales pressure cools down.
XPL still has strong recovery potential if sales supply declines and the community overcomes the fear of XPL FUD. However, if not addressed, XPL FUD could continue to erode confidence.
