TAIKO Price Drops After Getting Perpetual Futures Contract, Why?

Just recently, TAIKO, an Ethereum-equivalent ZK-Rollup built to scale Ethereum, made headlines after securing a perpetual futures contract listing. This major development usually brings positive momentum. 

But instead of a price rally, TAIKO price dropped sharply by over 12.63% in a single day, slipping to $0.4874 as of June 13, 2025. What happened? Why did the token react negatively to what seemed like a bullish event? Let’s dive deeper.

What is TAIKO Coin?

TAIKO Coin is a fully open-source, decentralized ZK-Rollup Layer 2 solution that mirrors the Ethereum experience. Anyone can run a Taiko node, proposer, or prover without permission, offering Ethereum-equivalent security and decentralization while reducing transaction costs.

Taiko leverages the “based rollup” model, relying on Ethereum’s block builders to sequence transactions, inheriting the base layer’s security guarantees. 

With more than 100 protocols already active on the network, ranging from DeFi to gaming, TAIKO is emerging as a strong contender in the Ethereum scaling space.

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TAIKO Perpetual Futures Contract

Source: Coinmarketcap

On June 11, 2025, TAIKO entered a Perpetual Futures Contract, allowing traders to speculate on its price with up to 50x leverage. 

Typically, this kind of listing increases visibility and liquidity. However, in this case, TAIKO’s price declined sharply afterward.

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TAIKO Price Drops After Perpetual Futures Contract 

Here’s the possible reasons why TAIKO price drops after perpetual futures contract:

1. High Leverage Trading = Higher Volatility

The introduction of leverage via perpetual futures means traders can now short the token easily. Some market participants likely took advantage of this, betting against TAIKO, driving the price lower.

2. “Sell the News” Effect

TAIKO perpetual futures contract listing had been anticipated. As a result, many investors may have bought in before the announcement and sold immediately after to secure profits. This is a common pattern in crypto markets.

3. Overheated Market Conditions

TAIKO saw a huge surge in volume, over $555.58 million in 24 hours, an 8.3% drop from the previous day. Such large inflows and outflows suggest that traders were aggressively entering and exiting positions, further fueling the downtrend.

4. Lack of Support from Spot Buyers

While TAIKO perpetual futures contract boost trading, they don’t necessarily translate into long-term holding. If spot market participants aren’t buying and holding, price dips can accelerate.

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Benefits and Risks of TAIKO Perpetual Futures Contract

Here’s the potential benefits and risks of TAIKO perpetual futures contract:

Potential Benefits:

1. More Liquidity: Perpetual contracts often attract more volume.

2. Market Exposure: Traders can go long or short on TAIKO easily.

3. Capital Efficiency: High leverage enables large positions with minimal capital.

Potential Risks:

1. Amplified Losses: A 1% move against your position at 50x leverage = 50% loss.

2. Liquidations: Many traders could have been liquidated, accelerating the price drop.

3. Market Manipulation: In low-liquidity environments, prices can be more easily influenced.

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What Should Traders and Investors Do?

If you’re holding or trading TAIKO Coin, here are some suggestions:

1. Watch Support Levels: $0.480 appears to be a short-term bottom, but further downside is possible.

2. Avoid High Leverage: Unless you fully understand the risks, start with low leverage.

3. Track Community Growth: TAIKO still has strong fundamentals and community support, which could aid a rebound.

4. Stay Updated: As a Layer 2 solution with real utility, TAIKO’s long-term potential depends on continued network growth and adoption.

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Conclusion

Despite landing a TAIKO perpetual futures contract, the TAIKO price dropped sharply, underscoring the unpredictable nature of crypto markets. High leverage, profit-taking, and speculative trading all played a part in the recent decline.

However, TAIKO Coin remains a technically solid project in the Ethereum ecosystem. While short-term volatility may scare off weak hands, those focused on the long-term fundamentals might view this dip as an opportunity.

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FAQ

What caused the TAIKO price drop?

The drop followed the launch of perpetual futures trading, triggering high-leverage speculation, shorting, and profit-taking from early buyers.

What is a Perpetual Futures Contract?

It’s a derivative that allows you to bet on an asset’s price without owning it. Unlike traditional futures, it doesn’t expire and allows high leverage trading.

Is TAIKO still a good investment?

TAIKO is backed by strong fundamentals as an Ethereum-equivalent ZK-Rollup. However, investors should be aware of short-term volatility and market risks.

Should I use 50x leverage on TAIKO?

Only if you’re an experienced trader. High leverage amplifies both gains and losses and can quickly lead to liquidation.

What makes TAIKO different?

It is permissionless, decentralized, and based on Ethereum block builders, offering both scalability and Ethereum-level security.