On August 4, the price of the YGG (Yield Guild Games) token, which had been stable for more than three months, suddenly changed. At around 1 a.m. that day, the price returned to above $0.2, and then began a crazy rise for less than 4 days. However, at around 8:30 p.m. on August 7, the price of YGG experienced a round of wild surge, briefly breaking through $0.9, but then quickly plunged, falling by 60% in just 4 hours.
As of 4:00 pm on August 8, the price of YGG was stable at around $0.35. In the violent fluctuations in the past few days, the price of YGG performed abnormally, and finally presented a situation of "double kill of long and short", which triggered a typical plot of joy and sorrow for retail investors in the secondary market. It is worth noting that in this process, many whales, market makers and investment institutions chose to quickly complete part of the shipment before the big dive or when the plunge just began.
The starting point of this round of market can be traced back to 8 pm on August 4, when Binance announced that it would launch YGG's 1-20x U-based perpetual contract. Since the launch of Binance perpetual contracts on August 5, YGG's funding rate has begun to rise rapidly, exceeding -0.1%, and attracted hundreds of millions of US dollars in contract holdings, close to the then-current market value of YGG. As the price of the currency rose, a short squeeze occurred, and shorts had to keep buying YGG to close their positions, further pushing up the price of YGG. On the evening of August 7, the price of YGG climbed rapidly, rising by more than 50% in an hour, and this short squeeze reached its peak. During this period, Binance issued an urgent announcement to shorten the settlement time of the YGG perpetual contract funding rate from 8 hours to 2 hours to cope with the drastic price fluctuations.
However, as the funding rate continued to decline, the market reversed significantly and the price of YGG began to fall rapidly. During this process, market makers and investment institutions smelled the best time to ship and completed some shipments. Data shows that market maker Wintermute Trading shipped the most among many institutions, depositing a total of 11.1 million YGG (about 6.7 million US dollars) to the exchange in the four days before August 7.
In addition, DWF Labs, an aggressive market maker, transferred 3.65 million YGG (at $0.61, a total of about $2.23 million) to Binance at around 10 p.m. on August 6. In addition to market makers, many YGG investment institutions also began to take advantage of the market to ship. During this period, YGG also released information about its Guild Advancement Plan (GAP) Season 4 and Q2 report. In the second quarter, YGG focused on the development of game products and infrastructure, strengthened cooperation with a number of partners, and provided community members with rich task rewards. As of August 8, the main assets of the YGG treasury include approximately 737 million YGG, 6.38 million USDC and 730,000 USDT, with a total value of approximately $265 million, but due to YGG price fluctuations, the value of assets may change.
In general, in a bear market environment, YGG's surge was mainly affected by factors such as the launch of the contract and insufficient liquidity. Institutions seized the opportunity to sell their stocks in a situation where both long and short positions were being killed. Can the leeks still have faith?