The Polyhedra Network price bounced back on Monday as investors attempted to buy the dip after it plunged by over 87% on Sunday.
Polyhedra Network (ZKJ) token was trading at $0.374, up 47% from its lowest point this week. This jump brought its market capitalization to $101 million, down from last week’s high of $620 million.
In an X post, Polyhedra attributed the crash to a series of abnormal on-chain transactions within a short period on the ZKJ/KOGE trading pair.
In another post, Binance blamed the crash on large holders removing on-chain liquidity from Polyhedra. Data shows that three wallets drained about $7 million in liquidity. In a note to crypto.news, a Bitunix analyst said in a note:
“On-chain analysis revealed that three major wallets executed a coordinated ‘liquidity pull + targeted dump,’ first crashing KOGE, then triggering ZKJ’s collapse — a classic bull trap. Warning signs emerged beforehand: LP withdrawals, plunging APYs, and reduced wash trading.”
ZKJ token price also crashed as investors braced for an upcoming token unlock. Tokens worth over $10 million will be unlocked on June 19, with the funds allocated to ecosystem and network incentives, foundation reserves, community, and token purchasers.
Beware of a dead cat bounce as the ZKJ price rises
The ongoing ZKJ price rebound may attract some investors looking to buy the dip. However, there is a risk that the rebound is a bull trap or a dead-cat bounce, a situation where an asset in freefall bounces temporarily before resuming its downtrend.
A good example of this is Mantra (OM), whose token plunged by over 90% on a Sunday a few months ago.
At the time, the developers blamed the crash on exchange-driven liquidations and insisted that the underlying technology remained strong, triggering a 500% surge shortly after its drop. However, the surge proved to be a dead-cat bounce, and the token eventually resumed its downtrend.
ZKJ may follow a similar path as the bull trap fades and existing holders exit their positions. In the note, the Bitunix analyst added:
“Confidence in ZKJ has collapsed — without clear capital inflows, a rebound is unlikely. Cease wash trading or arbitrage strategies, and stay alert to tokens with high FDV, suspiciously stable prices, or abnormal rankings.”
ZKJ crypto technical analysis
Technicals suggest that the ZKJ price may form either a rectangle or a triangle pattern as it consolidates, potentially a bearish flag or pennant. A pennant or flag formation would indicate further downside, possibly to the support level at $0.20.
