Berachain (BERA) has suffered a steep decline over the past week, shedding 30% of its value as bearish sentiment plagues the general market.
In the past 24 hours alone, the token has slid another 6%, deepening concerns of further downside. With growing bearish bias against the altcoin, this might be the case in the near term.
BERA Faces Mounting Downside Risk
Berachain’s sharp decline has triggered a surge in short positions across its futures market. This rise in demand for shorts is evident in its funding rate, which has been negative since the token’s launch on February 6. At press time, this is at -0.11%.
The funding rate is a periodic fee exchanged between long and short traders in perpetual futures contracts to keep prices aligned with the spot market.
A negative funding rate means that short traders are paying long traders, indicating a stronger demand for short positions.
As with BERA, if an asset experiences an extended period of negative funding rates, it suggests sustained bearish sentiment. It indicates that the token’s traders consistently bet on further price declines. This prolonged negativity could increase BERA’s price volatility and extend its price fall.
In addition, BERA has noted significant fund outflows from its spot markets over the past few days. Per Coinglass, the altcoin has noted almost $2 million in spot market outflows today alone.
When an asset experiences spot outflows like this, it signals a surge in selling pressure. It indicates a bearish trend as investors reduce exposure or take profits, potentially leading to further price declines.
BERA at a Crossroads—Break Below $6.07 or Rally Toward $7.36?
Berachain trades at $6.14 at press time, resting slightly above support at $6.07. If the bearish bias against the altcoin strengthens, its price could break below this support floor, causing the token to trade at a low of $5.35.
If the bulls fail to defend this level, BERA could slip to its all-time low of $4.74.
Real-World Assets (RWA) are becoming one of the most closely watched narratives in crypto as the sector evolves under increased institutional and regulatory scrutiny. The collapse of MANTRA served as a wake-up call, exposing operational vulnerabilities and sparking demands for higher standards across tokenization platforms.
While skepticism grows around decentralized RWA projects, the broader investment case for asset-backed tokens remains intact—especially as stablecoins and tokenized treasuries lead adoption efforts. Against this backdrop, several RWA altcoins are standing out in May 2025, showing both technical momentum and renewed investor interest.
Stablecoins and Treasuries Lead RWA Adoption Wave
The collapse of Mantra has triggered a wave of reflection and caution across the Real World Asset (RWA) sector. As Andrei Grachev, Managing Partner of DWF Labs, puts it:
“The Mantra collapse is really a pivotal moment for the RWA sector. It has exposed some serious vulnerabilities in how these permissionless tokenisation platforms operate. I think we’re going to see investors getting much more cautious and selective about where they put their money now. Institutional players will probably start demanding much higher standards of due diligence, and regulators might step in with more scrutiny too.”
This event has clearly shaken confidence in the structure of some decentralized RWA models, pushing institutional and retail participants toward more regulated, vetted alternatives.
At the same time, the debate around RWA tokens’ potential to decouple from broader crypto market volatility is gaining momentum.
In response to Binance Research’s observation that RWA tokens have shown more stability than Bitcoin during tariff events, Edwin Mata, Co-founder & CEO of Brickken, said:
“True RWA tokens are backed by real-world value and governed by legal frameworks that enforce rights, obligations, and cash flows. In that sense, they behave more like traditional securities and can, over time, become more resilient to macro-level crypto volatility, especially during periods of market stress, regulatory shifts, or geopolitical shocks like tariffs.”
Shahaf bar Geffen, CEO and Founder of COTI, reinforced this emerging divergence by stating:
“We‘re already witnessing the early stages of that decoupling. RWA tokens are anchored to tangible assets—real estate, commodities, invoices—which inherently provide a stability layer absent in purely speculative cryptocurrencies. The potential for RWAs to hedge against macroeconomic volatility, such as tariffs or inflationary pressures, is significant.”
The macroeconomic case is strengthening, but the technological and institutional backing behind RWAs is also evolving quickly. Kadan Stadelmann, Chief Technology Officer at Komodo Platform, believes institutional adoption will be a decisive factor:
“The adoption by mainstream financial institutions will separate RWAs from the rest of the crypto index. No other crypto product will be as extensively adopted by mainstream finance as RWAs other than stablecoins, which I would argue are a type of RWA.”
Here are the top 3 RWA coins to watch in May.
Ondo (ONDO)
ONDO has climbed nearly 14% over the past 30 days, recently breaking above the $1 mark for the first time since March 6. This move has brought renewed attention to the token, as its market cap approaches the $3 billion threshold again.
However, this upward price action comes amid a broader contraction in the space. According to data from rwa.xyz, total RWA on-chain value currently sits at $16.6 billion, representing a 16.92% decline over the past 30 days.
Despite ONDO’s short-term strength, its technical indicators are flashing caution. A death cross has recently formed on its EMA lines—a pattern often associated with bearish momentum.
The first key support is $0.866. If that level breaks, ONDO could decline to $0.819, with deeper support at $0.73 and $0.663 if the downtrend accelerates.
On the upside, if sentiment reverses and ONDO manages to break above the $1.04 resistance, a push toward $1.20 could follow, opening the door for a stronger recovery.
Reserve Rights (RSR)
Reserve Rights is up nearly 41% over the past 30 days, riding a wave of renewed interest following its Coinbase listing and lingering associations with incoming SEC Chair Paul Atkins.
Despite Atkins having no active ties to the project today, his early advisory role has fueled trader speculation about potential regulatory tailwinds.
This narrative, combined with Binance’s top traders heavily going long, has positioned RSR as one of the more politically charged tokens in the current market.
The listing alone sparked a 9% intraday jump, helping bring RSR back into the spotlight after a long quiet phase post-2021 peak.
Technically, RSR is approaching a critical decision point. The token recently attempted to break the $0.0096 resistance level twice and failed, signaling the importance of that threshold.
A successful breakout could open the door to $0.011, and potentially $0.0137 if momentum builds. However, failure to hold current levels could trigger a correction toward $0.0084, with deeper support at $0.0071 and $0.0057.
TokenFi (TOKEN)
Real-world asset (RWA) platform TokenFi (TOKEN) has surged nearly 40% over the past seven days, pushing its market cap back to the $20 million mark.
The sharp rise comes despite a notable drop in trading activity, with 24-hour volume falling over 59% to $8.13 million.
The divergence between price appreciation and declining volume raises questions about the rally’s sustainability, but for now, TOKEN is regaining attention as a small-cap RWA narrative play in the altcoin market.
From a technical standpoint, TOKEN is approaching key resistance levels. If the bullish momentum continues, the token could test $0.024 and $0.0275, with a potential breakout target of $0.041.
However, any reversal could see TOKEN retrace toward the $0.0194 support level. If that fails, deeper downside levels lie at $0.0137 and $0.0112.
The recent depeg incident involving sUSD from Synthetix has highlighted that this sector remains fraught with risks despite the immense potential of algorithmic stablecoins.
The sUSD incident is not the first to expose the vulnerabilities of algorithmic stablecoins. From technical challenges and regulatory pressures to dwindling community trust, projects in this space must navigate numerous obstacles to survive and thrive.
The Landscape of the Algorithmic Stablecoin Market
Algorithmic stablecoins, which maintain their value without direct asset backing, were once hailed as a breakthrough in decentralized finance (DeFi). However, according to CoinMarketCap data from April 2025, the total stablecoin market capitalization stands at $234 billion, while algorithmic stablecoins account for about $458 million, equivalent to just 0.2%.
This stark disparity reflects the reality that algorithmic stablecoins have yet to gain widespread trust from the community. High-profile failures like the collapse of UST/LUNA in 2022, coupled with regulatory uncertainties such as the EU’s MiCA framework, have fueled skepticism.
More recently, the depeg of Synthetix’s sUSD is a typical example of this model’s inherent risks.
A Deep Dive into Synthetix’s sUSD Depeg
Synthetix is a well-known DeFi protocol celebrated for its synthetic asset system. Within this ecosystem, sUSD is an algorithmic stablecoin designed to peg its value at 1 USD, backed by the SNX token and price data from Chainlink.
However, sUSD has faced significant challenges with a prolonged depeg recently. At the time of BeInCrypto’s report, sUSD was trading at 0.77 USD, which has persisted since late March 2025. The primary cause was a major liquidity provider withdrawing from the sBTC/wBTC pool on Curve, which triggered intense selling pressure on sUSD. This forced users to convert other synthetic assets like sETH or sBTC into sUSD, exacerbating the price decline.
On April 21, 2025, Kain Warwick, the founder of Synthetix, announced on X that the team had implemented an sUSD staking mechanism to address the issue. However, he noted that the mechanism remains manual and lacks a fully functional user interface (UI), which is expected to launch in a few days.
“Update on the sUSD depeg. We have implemented an sUSD staking mechanism but it’s very manual until the UI goes live in a few days. Here was my hot take from discord though,” shared Kain Warwick, founder of Synthetix.
Warwick further stated that if the incentive mechanism (carrot) proves ineffective, Synthetix would adopt stricter measures (stick) to compel stakers in the 420 pool to participate more actively. He emphasized that, with the collective net worth of SNX stakers reaching billions of USD, Synthetix has the financial resources to stabilize sUSD and resume development of derivative products on Layer 1.
No Successfully Algorithmic Stablecoin Project
Before the sUSD depeg incident, the market witnessed the dramatic collapse of UST/LUNA in 2022. UST, Terra’s algorithmic stablecoin, suffered a severe depeg, dragging LUNA’s value down from $120 to near zero. This event caused billions of USD in losses and significantly eroded trust in the algorithmic stablecoin model.
More recently, the ‘Godfather of DeFi’, Andre Cronje, behind Sonic (formerly Fantom), also shifted direction. Sonic initially developed a USD-based algorithmic stablecoin but later pivoted to a stablecoin pegged to the UAE dirham.
“Pretty sure our team cracked algo stable coins today, but previous cycle gave me so much PTSD not sure if we should implement,” Cronje stated.
Beyond technical risks, algorithmic stablecoins face mounting regulatory pressures. The EU’s MiCA regulation, effective since June 2024, imposes strict standards on stablecoin issuers to ensure consumer protection and financial stability. Under MiCA, algorithmic stablecoins are classified as ART (Asset-Referenced Token) or EMT (E-Money Token), requiring projects to meet complex compliance demands.
This intensifies the pressure on developers, especially as other jurisdictions also tighten crypto regulations.
These examples show the vulnerability of algorithmic stablecoins to liquidity shocks and market sentiment, particularly due to their lack of direct asset backing.
The Potential of Algorithmic Stablecoins
Despite the challenges, algorithmic stablecoins still hold developmental potential. A March 2025 post on X by CampbellJAustin suggested that a next-generation decentralized algorithmic stablecoin is feasible if lessons are learned from past failures.
“I actually think a next-gen decentralized algorithmic stablecoin is possible. I also think it will not be done correctly by the crypto community because the primary constraints are economic and risk management, not technological,” CampbellJAustin shared.
However, projects must focus on building more price stability mechanisms, combining algorithms with liquidity safeguards to succeed. Additionally, they should prepare for regulatory requirements, particularly in regions with stringent rules like the EU. Transparency in operations, regular audits, and clear communication with users are crucial to rebuilding community trust.
By addressing these factors, projects in this space can seize the opportunity to regain confidence and drive innovation.
