What happened
After posting explosive gains during the last week of trading, oxide finance (CRYPTO:XIDO) is losing ground in trading today. The cryptocurrency was down roughly 43% over the previous 24-hour period as of 2:40 p.m. ET on Saturday.
Despite a day of positive momentum for the major cryptocurrency market in which most of the top 100 tokens posted significant gains, Xido's valuation is taking a big step back. The play-to-earn (P2E) game and decentralized finance (DeFi) The token soared on Friday but is now seeing huge sell-offs as investors take profits and reassess its short-term upside potential.
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So what
There doesn't seem to be any coin-specific news to bring down Xido's price today, but it's not surprising to see the token give up some of the explosive gains it posted on Friday. The cryptocurrency is an ERC-20 token based on the Ethereal ( ETH -0.46% ) blockchain, and soared recently thanks to the debut of a new app centered around it.
P2E gaming is an emerging category that offers gamers the opportunity to earn cryptocurrencies and other digital currencies for their participation and achievements in video games. Xido launched his play-to-win metaverse game world this week, and the project's debut triggered explosive gains for the cryptocurrency. Despite today's big pullback, Xido has posted massive gains in March trading.
Now what
Xido reached an all-time low price of $5.52 per token on March 2 of this year, but saw a dramatic spike in subsequent trading. The cryptocurrency is now up more than 260% from that low, while also remaining roughly 87% below last June's all-time high.
Xido now has a market capitalization of approximately $2 billion. The cryptocurrency has been incredibly volatile over the last year of trading. Despite the recent metaverse app launch, which bolsters the token's fundamental valuation case to some extent, investors should move forward with the understanding that Xido is a high-risk, high-reward investment.
This article represents the opinion of the author, who may not agree with the "official" recommendation position of a premium Motley Fool advisory service. We are motley! Questioning an investment thesis, even one of your own, helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
