Upbit's Massive LOOM Transactions Drive Market Fluctuations
Jessie A Ellis Oct 17, 2023 11:36
Upbit's hefty LOOM transactions to Binance and Bithumb, alongside its substantial holdings of the token, have coincided with a notable price dip, spotlighting the exchange's sway over LOOM's market dynamics.
Recent market activities indicate a significant movement of LOOM tokens associated with Upbit, a well-known digital asset exchange. Over the past 48 hours, Upbit has escalated the frequency of depositing LOOM to other exchanges, Binance and Bithumb, summing up to over 120 transactions. This movement, involving approximately 19 million LOOM tokens (valued around $6.76 million), coincides with a 35% dip in LOOM's price within the same timeframe, according to Scopescan.
A wallet affiliated with Upbit now reportedly holds a staggering 653 million LOOM, about 50% of the token's total supply, valued at approximately $181 million2. Additionally, on a separate occasion, Upbit withdrew 11,081,386 LOOM, valued at $2.9 million, and the exchange's total LOOM holdings now account for 49.45% of the token's circulating supply.
The high concentration of LOOM tokens by Upbit and the recent massive transfers to Binance and Bithumb could potentially be influencing LOOM's market liquidity and price stability. The substantial holding and movement of LOOM tokens hint at a possible market manipulation scenario, which might be a contributing factor to the observed price volatility. Over the last month, LOOM's price surged over 1000%, increasing its market capitalization significantly before this recent dip4.
The pattern of LOOM token movement, especially between exchanges, warrants close monitoring by both regulatory authorities and market participants. The prevailing market conditions surrounding LOOM tokens, orchestrated by hefty transactions associated with Upbit, reflect a broader narrative of market dynamics in the burgeoning cryptocurrency domain.
LOOM is the native otken of Loom Network. Loom Network, based on Ethereum, serves as a platform for developers to build large-scale decentralized applications. Launched on October 1, 2017, it enhances smart contract computing power while reducing costs for certain tasks. By allowing interaction with off-chain third-party APIs, Loom enables developers to integrate their applications with external systems seamlessly without changing the programming language.
Utilizing Plasma for faster transactions, Loom addresses scalability issues prevalent in blockchain networks. It stands out by enabling Ethereum Solidity applications to run on side chains with tailored consensus mechanisms. The LOOM token, essential for membership, facilitates access to all apps on the network and the transfer of digital assets between Ethereum and Loom DAppChains. Through the zkLoom protocol, it leverages Ethereum's security infrastructure, ensuring a secure, cost-effective blockchain environment.
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