A small-cap altcoin known as Tellor (TRB) recently experienced a remarkable surge, skyrocketing to a new all-time high above $600. However, this rapid ascent was short-lived as the cryptocurrency encountered a sudden crash that wiped out all the gains within a matter of hours on December 31. This abrupt turn of events has raised suspicions of price manipulation within the market.
Questionable Transfer and Timing
According to blockchain data sourced from Etherscan, on-chain analysts from Lookonchain observed that the Tellor team transferred 4,211 TRB, valued at approximately $2.4 million, to a wallet linked to Coinbase at around 8:41 pm UTC. Interestingly, this transaction coincided almost perfectly with the peak of the price surge, fueling concerns of market manipulation.
“The timing aligned almost perfectly with the high during the price pump, adding to suspicions of market manipulation.” – Lookonchain
In the aftermath of this fateful transfer, the price of Tellor experienced a drastic plummet. CoinGlass data cited by Lookonchain revealed that over $68 million in liquidations resulted from this sudden drop on January 1.
The Whales and their Strategy
Spot on Chain, an on-chain analytics firm, also highlighted another troubling finding. They noted that 26% of the circulating supply of TRB was held by just 20 large wallets. These powerful entities had accumulated the token when it was priced around $15, and since then, the price has multiplied by approximately 15 times.
“Over the past two months, the whales have slowly deposited their tokens onto exchanges, creating a pump-and-dump cycle to liquidate their holdings.” – Spot on Chain
It appears that these whale wallets engaged in a carefully orchestrated scheme to exploit the price volatility for maximum gains. By gradually depositing their tokens onto exchanges over time, they successfully orchestrated a pump-and-dump cycle that allowed them to liquidate their holdings.
The Ripple Effect
The unprecedented price fluctuations in TRB had far-reaching consequences. Kain Warwick, the founder of blockchain protocol Synthetix, revealed that the large price swings in TRB resulted in approximately $2 million in losses for holders of his protocol’s native SNX token. This loss occurred due to the sudden change in open interest and price of the TRB token, which Synthetix’s decentralized derivatives markets failed to properly reflect.
“Several short positions were opened as the price spiked today and with the dislocation of spot and perp prices there was no [arbitrage] to balance it.” – Kain Warwick
Warwick explained that the decentralized derivatives markets were unable to balance the sudden spike in TRB’s price, leading to the opening of vulnerable short positions and resulting in significant losses.
Tellor, the decentralized oracle protocol, utilizes TRB as its utility and governance token. TRB is actively traded on reputable exchanges such as Binance, OKX, and Coinbase, with Binance accounting for nearly half of the trading volume in the past 24 hours. Despite these significant price movements and concerns of manipulation, the Tellor team has yet to issue any official statements addressing the situation.
