#NEKO

The phenomenon of Neko coin having high trading volume but a continuously falling price is essentially a comprehensive result of market supply and demand imbalance, project risk release, and investor behavioral game theory. The following analysis will delve into the specific reasons and underlying logic:

1. Panic selling dominates the market, high trading volume is actually a "liquidity trap".

1. Hackers attack triggers a crisis of trust
On August 22, 2025, Neko Network was attacked again due to a smart contract vulnerability, causing the asset pool to be frozen and hackers to transfer part of the funds to a mixing platform. This incident directly impacted investor confidence, leading holders to sell off their assets at any cost. Although the hackers returned $1.1 million in assets, the remaining funds' whereabouts are unknown, intensifying market concerns about the project's security. This vicious cycle of "technical risk - sell-off - price decline" resulted in a surge in trading volume while prices continued to fall.
2. High-Leverage Contracts Triggering Cascade Liquidation
Neko coin's price volatility often exceeds 16% within 24 hours, and high-leverage trading is prevalent. When the price falls below key support levels (such as $0.04), the exchange automatically triggers forced liquidations, and a large number of sell orders flood in, further driving down the price, creating a negative feedback loop of "decline-liquidation-accelerated decline." For example, on August 10, the weekly drop reached 88.66%, and some contract users faced liquidation due to insufficient margin, which exacerbated the liquidity crisis.
3. The resonance effect of retail investors following trends and institutional withdrawals
The community sentiment has shifted from early enthusiasm to panic. On-chain data shows that large holders with over 1000 coins concentrated their sell-off in mid-August, while negative discussions among retail investors on social media platforms (such as X) surged, forming a "stampede" exit. This collective behavior has led to high trading volumes, but weak buying power, making it difficult for prices to stabilize.

2. The deterioration of the project's fundamentals weakens the support for long-term value.

1. Technical vulnerabilities and lag in ecological construction
Although the NeonNeko project claims to rely on the high-performance advantages of the Solana chain, its associated project, Neko Network, suffered a loss of $4 million due to vulnerabilities in 2021 and was attacked again in 2025, exposing security risks within the technical team. In addition, the cross-chain wallet and NFT marketplace features originally planned for launch in Q3 2025 have been delayed, and user growth has not met expectations, resulting in insufficient utility of the tokens.
2. The intrinsic flaws in economic model design
The NEKO token employs a deflationary mechanism with a 5% sell tax (half for burning and half injected into the treasury), but the actual effect is limited. The current circulation accounts for only 10.6% of the total supply (212 million tokens), and the burning rate is slow, failing to offset the market sell-off pressure. The community dividend mechanism from the treasury is also difficult to sustain due to the shrinking trading volume, further diminishing the token's appeal.
3. The Fading of Meme Attributes and Competitive Squeeze
As the first meme coin on the Near protocol, NEKO initially relied on community hype to gain popularity, but with the competition from established meme coins like Shiba Inu and Dogecoin, as well as emerging projects like PEPE, its "novelty" has gradually worn off. The market's aesthetic fatigue towards meme tokens, combined with a lack of substantial application scenarios, has led funds to flow towards more narrative-driven DeFi or AI concept projects.

3. The Multiple Pressures of Market Structure and External Environment

1. The high volatility of the overall cryptocurrency market
In August 2025, after Bitcoin's historical high of $124,500, the price plummeted, with a weekly decline of over 5%, triggering a sell-off of risk assets in the market. As a high-risk asset, Neko coin was the first to be affected during the market downturn. For example, when Bitcoin rebounded by 4% on August 23, NEKO only saw a slight increase of 5.56%, indicating its weak correlation with mainstream assets and the loss of liquidity premium.
2. Regulatory Pressure and Compliance Risks
The continued crackdown on cryptocurrency trading by countries such as China has led some investors to sell Neko coins through over-the-counter channels. In addition, the project's failure to pass compliance reviews by mainstream exchanges (such as Coinbase not listing the NEKO/USD trading pair) has restricted the entry of institutional funds, exacerbating the imbalance between supply and demand in the market.
3. The disruption of wash trading and false trading volume
Some exchanges have the phenomenon of "wash trading," where bots create false trading volumes to create the illusion of ample liquidity, attracting retail investors. For example, a certain platform's NEKO/TRY trading pair had a daily transaction volume of 52.89 million yuan, but the actual user holdings did not significantly increase, which may raise suspicions of market manipulation. This false prosperity conceals the shrinking of real demand, leading to a divergence between price and trading volume.

4. The vicious cycle of technical aspects and capital flows

1. Key support level breach triggers programmatic sell-off
Technical analysis shows that NEKO broke below the long-term support line of $0.04 in mid-August, triggering stop-loss orders for quantitative trading strategies. The MACD indicator continues to show a bearish dominance, and the RSI briefly fell below 20, entering the oversold territory but did not rebound, indicating a lack of bottom-fishing capital in the market. This technical breakdown further reinforces bearish expectations.
2. Fund Withdrawal and Liquidity Layering
On-chain data shows that from August 15 to 22, the net outflow of NEKO from centralized exchanges reached 120 million coins, while the trading volume on decentralized exchanges (DEX) accounted for less than 10%. Funds are being transferred from CEX to on-chain wallets, reflecting investors' distrust in the liquidity of exchanges. Some exchanges have experienced a situation of "price but no market" due to insufficient order book depth, exacerbating price volatility.

5. Future Risks and Potential Opportunities

1. Short-term risks: Continuous selling and regulatory upgrades
If the project team cannot fix the vulnerabilities and launch core functionalities before September, the price may drop to the historical low of $0.02. Additionally, the U.S. SEC's regulatory scrutiny on meme tokens may expand, and if NEKO is deemed an "unregistered security," some compliant exchanges may delist this token, triggering a new wave of sell-offs.
2. Long-term Opportunities: Technical Repair and Narrative Reconstruction
If the NeonNeko team can launch a cross-chain wallet and NFT marketplace by the end of 2025 and enhance community engagement through a DAO governance mechanism, NEKO may gradually detach from its meme attributes and shift towards value support. For instance, its predictive model shows that if the user base expands to the millions by 2035, the price is expected to rebound to $0.1766, but this goal depends on substantial breakthroughs in ecological development.

Summary: Trading volume ≠ value, be wary of liquidity traps.

The case of Neko Coin reveals a typical paradox in the cryptocurrency market: high trading volumes may be the result of panic, manipulation, or technical failures, rather than a reflection of genuine demand. Investors need to penetrate the surface of the data and pay attention to the project's technical strength, community governance, and changes in market sentiment. For ordinary users, trading high-volatility coins blindly without fundamental support may pose the risk of permanent loss of principal.