The SPK token, one of June's most anticipated launches, faced a price drop of over 25% in the first 24 hours of trading. Let's examine the main reasons for this event.
Causes of SPK Token Price Drop
The primary cause of the crash was the enormous supply shock resulting from the SPARK airdrop. Binance had a unique 'HODLer Airdrop' where users who staked BNB for just four days received free SPK tokens. This action alone dumped 200 million SPK into circulation, and users immediately sold these tokens, resulting in sustained selling pressure and a rapid price drop.
Liquidity Issues in the Market
The initial 24-hour trading volume for SPARK was substantial, exceeding $538 million across several exchanges. However, most of these exchanges lacked deep order books, resulting in insufficient buyers or sell limits at various price levels to absorb the influx of new tokens. This led to high volatility in SPK, with a turnover ratio of 6.06, indicating unstable support.
Future of SPK Token
Despite the challenges, SPARK continues to attract interest. Supporters point to its $8 billion in Total Value Locked (TVL) and healthy staking rewards. However, if the team does not focus on liquidity and community trust, the token may struggle to recover in the near future.
The SPK token has had a rocky start, and its future depends on the team's ability to address liquidity issues and rebuild trader confidence.
