Bricks (BRICK), the native token of Reddit’s Fortnite community, has surged a staggering 110% in the last 24 hours. This increase comes after a difficult two-month period in which the altcoin project lost more than 80% of its value. While the broader cryptocurrency market struggles with volatility, Bricks has defied the odds. Here are the details…
Bullish for Reddit-backed altcoin
The bulk of this trading frenzy took place on the Kraken exchange, with total trading volume across all platforms rising to nearly $750,000. This impressive figure represents an 800 percent increase compared to the previous 24-hour period, according to CoinMarketCap data. It is important to note that there is no clear catalyst that can be identified for this sudden price increase. In a crypto environment marked by unpredictable changes, Bricks’ performance is remarkable, especially considering that Bitcoin (BTC) fell below $27,000 just a day ago.
Bricks, an ERC-20 token, first attracted attention when it was distributed to active members of the Fortnite subreddit. However, its recent resurgence can be traced back to August, when the hype around other Reddit community tokens like r/cryptocurrency’s Moons (MOON) began to gain momentum. A key factor that stands out in this story is the relatively weak liquidity of Bricks across all exchanges. A market depth of just 2% on Kraken equates to around $2,500 on both the buy and sell side. Market depth is a critical metric that evaluates the amount of capital required to move an asset in a particular direction.
Lack of liquidity is critical
This lack of liquidity in an asset that has experienced such a significant rise poses a potential risk to investors. Lack of liquidity in an asset that has experienced a significant rise poses a risk for traders. Because the price risks falling gradually with minimal effort. It could also potentially trap those who bought the recent high. Weak market depth means the price could easily move lower with minimal effort, potentially trapping those who bought at recent highs.
While Bricks’ recent rise has caught the attention of the crypto community, it also serves as a stark reminder of the highly speculative and unpredictable nature of the cryptocurrency market. Investors should proceed with caution and closely monitor market dynamics, especially liquidity. As the crypto world continues to witness extraordinary stories like Bricks, it becomes clear that this space is always full of surprises and investors must remain vigilant as they navigate its ever-changing landscape.
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