Sun Yuchen's investment caused RIVER to plummet 30%, with leverage and unlocking adding double pressure

RIVER experienced a fierce wealth game within 24 hours. Yesterday (January 22), after Tron founder Justin Sun announced an $8 million investment, the token price soared to a historic high of $48.74. But in just one day, the price fell to $31, a 30% decline. Behind this extreme volatility are multiple pressures from futures leverage, token unlocks, and the overall market downturn.

Timeline of the Wild Price Fluctuations

RIVER’s price changes have been extremely volatile over the past week:

In just a few days, from $27 to $48 and then down to $31, this level of fluctuation has exceeded normal market behavior.

Market Reaction to Justin Sun’s Investment

According to reports, Justin Sun’s $8 million investment was mainly used to support deep integration of River within the TRON ecosystem and the deployment of chain-abstracted stablecoin infrastructure. This investment indeed triggered a strong market response—token prices increased by over 33% within 24 hours of the announcement.

But the key issue here is: the investment news itself is not enough to justify such high prices. According to relevant information, analysis firm CoinGlass pointed out that RIVER’s futures trading volume far exceeds its spot trading volume, indicating that most of the price movement is driven by leverage trading rather than natural market demand.

Dual Pressures of Leverage and Unlocks

Futures leverage-driven false prosperity

CoinGlass’s analysis shows that RIVER’s price trend is mainly driven by leverage and liquidation cycles, not genuine market activity. This indicates:

• Many traders are long in the futures market, using leverage to amplify gains
• When prices pull back, leverage liquidations trigger chain reactions
• Futures trading volume far exceeds spot, implying a lack of real liquidity support

Hidden pressure from token unlocks

According to data, over $940 million worth of tokens, including RIVER, were unlocked on January 20. This means:

• Early investors and team members received a large amount of circulating tokens
• During price surges, these holders have strong incentives to sell
• The influx of unlocked tokens into the market creates significant selling pressure

Negative Impact of Overall Market Environment

Market data from January 23 shows the overall crypto market trending downward. On the same day, BTC fell 0.35% below $90,000, and ETH dropped 2.10% below $3,000. In this environment, high-risk assets are among the first to be impacted.

In contrast, only the GameFi, AI, and RWA sectors remain relatively resilient. Although RIVER belongs to the DeFi sector, it lacks sector support during market declines.

Key Insights

This rapid rise and fall of RIVER offers several important market lessons:

• Risks of leverage trading: When futures trading volume far exceeds spot, prices often do not reflect true value but are driven by leverage positions
• Underestimated impact of token unlocks: During concentrated unlock periods, even positive news can be offset by unlocking pressure
• Large investments do not guarantee price support: Sun’s $8 million investment temporarily boosted the price, but long-term value depends on the project’s genuine progress

Summary

The process of RIVER falling from $48 to $31 is essentially a return from a leverage-driven false prosperity to reality. Justin Sun’s investment is positive news, but under the dual pressures of excessive futures leverage and token unlocks, this positive sentiment was quickly absorbed and reversed.

The core risk of such highly volatile assets is: prices driven by leverage positions rather than fundamentals. For ordinary investors, chasing highs in this environment is akin to dancing on the edge of liquidation. True opportunities often emerge after risk is released, not at the FOMO peak.