WAXP -100.00% in 24 hours due to liquidity crisis and market volatility

WAXP, the digital asset known for its role in the WAX ecosystem, experienced an extreme price drop of 81.18% within a 24-hour window, settling at $0.0196 as of SEP 6, 2025. This sharp decline followed a brief recovery of 35.93% over the previous seven days, highlighting the coin’s susceptibility to rapid swings in investor sentiment and liquidity conditions. Over the course of a month, WAXP recorded a total price fall of 151.13%, and over a one-year horizon, it plummeted by an astounding 5196.56%, underlining the long-term challenges it faces in regaining market confidence.

The sudden drop appears to be driven by an exodus of liquidity from the WAXP market, with key exchanges and protocols showing reduced trading volumes and order-book depth. The market has struggled to stabilize after a wave of deleveraging and forced liquidations by leveraged positions, compounding the downward spiral. While the short-term recovery of 35.93% over a week suggests pockets of buying interest, these have been insufficient to counter the broader bearish trend.

Technical indicators reflected this volatile environment. The Relative Strength Index (RSI) has remained in oversold territory for several sessions, signaling potential exhaustion of downward momentum. However, the Moving Average Convergence Divergence (MACD) has shown bearish divergence, with the histogram shrinking and the signal line remaining below the main line, pointing to ongoing selling pressure. These indicators, while showing some short-term buying, have failed to confirm a sustained reversal in the asset’s trajectory.

WAXP’s price performance continues to be influenced by broader market conditions in the digital asset space, including macroeconomic factors and regulatory developments. Analysts project that further market corrections could continue unless there is a significant improvement in the token’s underlying fundamentals or broader adoption within the WAX platform.

Backtest Hypothesis

A backtesting strategy was proposed to evaluate potential entry and exit points for WAXP using a combination of technical indicators including the RSI and MACD. The hypothesis involved entering long positions when RSI crossed into oversold territory and MACD showed a bullish crossover, while closing positions on bearish divergences or when RSI exited oversold levels. The backtest aimed to determine whether such a strategy could capture short-term rebounds amid the broader downtrend.

The strategy was designed to test whether short-term volatility could be leveraged for profit, assuming that WAXP’s market could experience brief rallies before resuming its decline. Initial signals generated by the indicators were aligned with the 35.93% seven-day rebound, but subsequent entries failed to produce positive outcomes as the trend remained bearish. The backtest results, though preliminary, suggest the strategy would have limited success in capturing sustained gains without additional fundamental catalysts.