Hamster Kombat (HMSTR), the Tap-to-Earn game on Telegram, is experiencing a huge price dump. HMSTR token has crashed more than 53% in the past 7 days, with a further 17% decline in the past day, and investors are worried.
At the time of writing, HMSTR is valued at $0.0009335, which is almost 90 percent lower than its all-time high of $0.01. The crash occurs against the backdrop of a whale sell-off, airdropped token dump, and sharp decline in user activity.
Analysts suggest that one of the biggest factors that caused the crash is the sell pressure of airdrop recipients and whales. More than 131 million users got free HMSTR tokens, and many of them are currently dumping their assets.
Nansen data indicates that exchange balances were increasing, indicating that a huge dump was imminent. Meanwhile, perpetual funding rates on HMSTR have rolled over to the downside, indicating high short interest.
The user excitement has declined drastically, and the number of active users has declined from 300 million to 13 million. The airdrop structure is dissatisfactory to many users, with only a percentage of tokens being claimable immediately. Confidence has also been damaged by technical problems in TON and Telegram wallets.
Analysts such as Crypto Philip reckon that the Tap-to-Earn model is already overstaying its welcome, and poor tokenomics—64 billion tokens are in circulation with more unlocks in the future—are not helping.
The future of HMSTR is uncertain in the crypto market, which is otherwise stable. The project may slip further without a rapid recovery or a turn in sentiment.
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