PONS falls 71% from ATH as Robinhood Chain activity fades – Where’s the floor?

PONS [PONS] fell more than 17% in the past 24 hours as the market paused again.

The launchpad token also slipped below a $200 million market cap for the first time since August. That move put PONS in a difficult spot. The token was trading at a deep discount, but Robinhood Chain activity was fading fast.

PONS crashes 71% from its ATH

PONS has now extended its total drawdown from its all-time high to 71%. The correction has lasted nearly a month and a half. During this period, PONS fell from $0.9725 to $0.2897.

The token was also approaching the 0.786 Fibonacci Retracement level at $0.229.

Meanwhile, the downtrend remained clear. The Choppiness Index declined to 36.86, confirming strong bearish strength.

On top of that, the Stochastic Momentum Index was in oversold territory at negative 82. This showed that weakness could continue in the short term.

If the Fibonacci Retracement levels at $0.229 and $0.121 fail, PONS could see a full retracement. Still, the steep discount may start attracting buyers looking for a recovery setup.

Is Robinhood Chain cooked?

While the coin was weak technically, its network activity was also dwindling. Surprisingly, most tokens launched on Robinhood Chain, like Cash Cat [CASHCAT], Artificial Inu [AI], and BONER, were in huge drawdowns of more than 10%.

This synchronization across the chain was evident in fees and DEX volumes. For instance, fees fell from a maximum value of $11.42 million to $595K, a 95% decline.

Similarly, average daily DEX volumes plunged from $173 million to $8.95 million. The two metrics showed low network usage across the Layer 2 (L2) chain.

Furthermore, 54% of the token trading volume was seller-biased, accounting for $134 million against $114 million for longs.

Are investors capitalizing on the discount?

Despite the low usage, Robinhood CEO Vlad Tenev was fully supportive of increasing the chain’s usage. Tenev outlined that the chain was built for tokenized real-world assets (RWAs) and the apps people actually want to use, like PONS.

So essentially, investors started to buy the dip, as seen in the Long/Short ratio across exchanges. Retailers, whales, and smart money were bullish with the ratio above 1.41.

However, the whale position on OKX was extremely bearish with a ratio of 0.70, while on Binance it was 1.99.

This resulted in the OI-Weighted Funding Rate turning green over the 30-minute timeframe. This indicated there was genuine buying activity even with the price declining.

But for price direction to change, the buying volume has to eclipse that of shorts. Again, prices need to flip the supply zone at $0.388 into support.

Final Summary

• PONS crashes 71% from its all-time high, with market cap falling below $200M for the first time in two months. 
• PONS was declining due to low network activity, but buyers were starting to show interest after Vlad Tenev’s backing.