Monad Token Extends Slide Amid Profit-Taking, Spoofed Transaction Concerns

The native token of the newly launched Layer-1 blockchain, Monad, suffered further losses on Thursday amid volatility that has plagued the token since its debut roughly three days ago.

The crypto is down 15% over the last 24 hours to $0.03 after dropping from $0.04 late into the U.S. trading session. It remains up 47% since its November 25 debut, thanks mainly to its solid rise from an opening price of around $0.02, according to CoinGecko data.

Some signs point to early token holders booking profits with a bid-ask delta indicator at 10% order book depth turning negative after Monad stabilized around $0.47 on November 26.

In other words, the orderbook imbalance shows sellers are currently outweighing buyers in that specific price zone. Derivatives traders have also amplified the spot-driven decline. 

Steady open interest, coupled with a steep decline in the cumulative volume delta, suggests that new short positions are being opened, adding downward pressure to the drop.

"Expectations are still constructive long term: investors are looking for real workloads, genuine developer traction, and ecosystem partners to validate Monad’s high-throughput thesis," Shivam Thakral, CEO of Indian crypto exchange BuyUCoin, told Decrypt. "But after the recent drop, the market will demand evidence, not just benchmarks, before re-rating the asset."

The sell-off follows a network spoofing incident that emerged just days after its mainnet launch. 

Bad actors began spoofing fake token transfers on Monad, a tactic designed to create confusion and erode trust, Decrypt previously reported. 

Monad CTO and co-founder James Hunsaker confirmed the issue on Tuesday, warning users about transactions that falsely appeared to come from his wallet.

The sharp price correction stands in stark contrast to the network's usage metrics, which have attracted nearly 150,000 active users and recorded 4.7 million on-chain transactions, according to Artemis data.

Stablecoin transfers to the Layer 1 blockchain, meanwhile, have skyrocketed to $711 million following successful collaborations with Solana and deBridge to advance cross-chain asset flows.

The divergence between robust on-chain growth and weak price action is an all but common theme in the current market, with risk-off sentiment continuing to apply pressure across the broader crypto sector.