Yield Guild Games surged nearly 600% in less than a week, smashing through the top gainers charts before abruptly crashing.
According to reports, a new Binance trading product and an ongoing community gaming event have played a pivotal role in the incredible price rally of the YGG token.
According to data from CoinmarketCap, the Yield Guild Games (YGG) token saw a dramatic surge over the past week, rising by 580% and reaching a peak of $0.93 on the 7th of August, 2023. However, the token abruptly crashed soon after reaching this price level and is currently trading at around $0.36. However, the token had hinted at a decline in price in its gradually dropping trading volume. The trading volume recorded a drop of 26% in 24 hours, falling under $500 million, while the market cap increased by $17 million, reaching $161 million.
Why Did The YGG Price Rally?Observers attributed the surge in the YGG token’s price to a couple of major factors. On the 3rd of August, Yield Guild Games announced the 4th season of the Guild Advancement Program (GAP). The Guild Advancement Program is a periodic gaming event that distributes rewards such as tokens to community members who successfully complete specified quests in participating in YGG-affiliated games.
The 4th season of Yield Guild Games includes some of the biggest names in the space, such as Splinterlands, Skyweaver, and Axie Infinity. As a result, it should come as no surprise that the Yield Guild Games network usage saw a spike, reaching a one-month high of 192 active addresses. Yield Guild Games stated in its press release,
“Some of the community’s most recent top picks are joining the fold this season, with all-new quests for guild members to dive into as they hone their skills and establish their web3 reputation. The season will officially begin on the 3rd of August, 2023, and will run until the 27th of September, 2023.”
Barely a day later, Binance announced plans to launch a YGG/USDT trading pair for perpetual contracts on its CEX platform, allowing up to 20x leverage. Available on-chain data suggests that the announcement brought in about $100 million worth of new capital into the YGG ecosystem.
Whales Dumping Share Of YGGWhile the growth has been quite notable, reports have emerged of venture capital companies who initially backed the project, reportedly looking to sell their share of YGG on Binance. Data from LookOnChain sourced on the 7th of August shows that Bitkraft Ventures and DWF Labs have moved their YGG holdings to Binance and are most likely looking to sell. DWF Labs had received around 29 million YGG from the Yield Guild Games Treasury. However, on-chain data has suggested that most of these tokens have been moved to exchanges. Bitkraft Ventures also made large deposits on Binance using FalconX.
Another whale, Wintermute Trading, has reportedly deposited just over 11 million YGG worth $6.7 million to different exchanges over the past four days. It currently holds a further 2.5 million YGG, valued at around $1.5 million. LookOnChain also showed that Youbi Capital had deposited around 1 million YGG to Binance. The firm currently holds about 11 million YGG. Sfermion has also jumped on board the selling wagon, using FalconX to deposit its YGG tokens on Binance.
Large deposits generally signify an investor’s willingness to exchange the token for other assets or sell them. This is also true of whales such as the ones mentioned earlier. Smaller investors generally tend to follow larger investors, copying their selling behavior.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
