Aster (ASTER) plunged 11.31% over the past 24 hours, significantly underperforming the broader cryptocurrency market, which declined just 2.96% in the same period. The sharp selloff stems from a confluence of technical weakness, macro headwinds, and growing skepticism around the sustainability of its newly expanded token buyback mechanism.
On January 19, Aster announced it would double its fee allocation to token burns—raising it from 20% to 40% of daily platform revenue—as part of an accelerated five-stage burn plan. While the move was framed as a bullish supply-reduction strategy, traders reacted with caution. On-chain data reveals that platform fees have already tumbled 41% month-over-month, casting doubt on whether current trading volumes can support the ambitious $3.2 million daily burn rate implied by the new policy. With 24-hour spot volume down nearly 20% to $271 million, concerns are mounting that the buyback program may become a liability if fee income continues to erode, potentially forcing the protocol into a precarious position where it must sell reserves or dilute incentives to maintain operations.
Compounding these fundamental worries, ASTER’s price action suffered a critical technical breakdown. The token breached the pivotal $0.72 support level—a key Fibonacci retracement (38.2%) of its 2025 rally—and slipped below its 30-day simple moving average at $0.719. This triggered a cascade of stop-loss orders, exacerbated by thin liquidity beneath the psychological barrier. Despite the 7-day RSI dipping into oversold territory at 34.72, buyers failed to step in, leaving the next major support zone at the 2025 low of $0.6656—a level representing roughly 4% further downside from its current price near $0.638. Traders are now watching closely whether ASTER can reclaim the January 17 low of $0.68; failure to do so could confirm a bear flag pattern with a measured move target near $0.35.
The broader market environment hasn’t helped. A risk-off sentiment has gripped the altcoin sector, with the Altcoin Season Index falling 7.14% over the week and the Crypto Fear & Greed Index slipping from 49 to 45. In the past 24 hours alone, $632 billion in derivatives positions were liquidated—68% of which came from altcoins. While ASTER’s decline outpaced the average altcoin drop of 7.3%, suggesting project-specific vulnerabilities, the 305% surge in spot volume hints at both panic selling and potential accumulation near yearly lows by contrarian investors.
Ultimately, ASTER’s recent slump reflects a market punishing tokens with high effective inflation—its circulating supply is still expanding at a monthly rate of 4.8%—despite aggressive deflationary promises. The sustainability of its revenue-dependent tokenomics is now under intense scrutiny. One key metric to monitor is the Binance ASTER/USDT perpetual funding rate, currently at -0.0023%; prolonged negative funding could signal continued bearish sentiment. Should price decisively break below the $0.6656 yearly low, it may not only trigger further technical selling but also undermine the narrative behind its impressive 656% annual gain.
Source:: Why Aster (ASTER) Crashed 11% Amid Buyback Doubts and Technical Breakdown