Key Takeaways
TOWNS crypto crashed 50% after whales moved tokens to exchanges and retail followed. Futures data signals more downside risk ahead.
Towns [TOWNS] plummeted 50.79% from an all-time high of $0.088 to an all-time low of $0.035 before slightly recovering by press time.
As of this writing, Towns was trading around $0.039, marking a 29% recovery from the new low recorded on the daily charts.
At the same time, its market cap shrank from $163 million to $86.3 million, reflecting rapid capital outflows. So, what happened exactly?
Whales dump as top holders rush to cash out
According to AMBCrypto’s analysis of Nansen data, whales began aggressively selling after TOWNS rallied to $0.08.
Source: Nansen
On the 4th of August, TOWN’s top holders increased their holdings by 3.13 billion tokens. In total, top addresses’ holdings surged 61% to 10.21 billion tokens.
However, as the price rallied on the 5th of August, these addresses decided to cash out and take profit.
Exchange Balance for top wallets surged to 525.05 million—a massive 2.6 billion percent increase—while withdrawals amounted to just 8 million.
This pattern indicates whales were positioning to offload into market strength. Naturally, such exchange inflows exerted downward price pressure, contributing to the rapid collapse.
Source: Nansen
Retail joins the exodus
Unsurprisingly, as prices jumped, retailers on the spot market jumped to sell.
On the 5th and 6th of August, Coinalyze recorded a cumulative Sell Volume of over 2 billion tokens across Binance and Coinbase.
Net Buy/Sell Delta came in negative for both days, at -42 million and -11 million, respectively.
Source: Coinalyze
Such sustained sell pressure signals aggressive selling on the spot market. Usually, when sellers dominate the market, it signals a lack of long-term conviction, or early investors cash out to realize profits and avoid losses.
Futures metrics show traders are shorting the bounce
Futures sentiment turned bearish quickly.
Open Interest fell from $12.6 million to $10.93 million — indicating cooling speculative demand. The Long/Short Ratio dipped to 0.88, with 53% of positions now short.
Source: Coinalyze
Adding to this, the Funding Rate remained negative at -0.0240, while the Predicted Funding Rate stood at -0.0227, showing traders were still paying to hold shorts.
Source: Coinalyze
These readings highlight continued expectations of downside.
Source: Coinalyze
Will TOWNS crypto see more losses?
According to AMBCrypto’s analysis, TOWNS crypto token experienced significant losses and subsequently plummeted as sellers dominated the market.
Therefore, if selling activity continues at the current speed, the token will most likely make more losses. A continuation of the current trend will see Towns dip to $0.034.
Source: TradingView
However, if buyers step in and displace sellers, a renewed demand could boost the token to reclaim $0.046.
