The ADS‑ratio change is effectively a 20‑for‑1 reverse split (1 ADS will now represent 4,800 ordinary shares instead of 240). The underlying economics of Token Cat do not change, but the number of tradable units on the NASDAQ will drop by roughly the same factor. In practice this shrinks the order‑book depth: fewer shares are available at each price level, so market‑makers will post wider bid‑ask spreads and the displayed daily volume will look much thinner. Traders who rely on tight execution may see slippage increase, especially in the first few days after the August 29 effective date when market participants are still calibrating their quoting algorithms.
From a technical standpoint the price chart will jump about 20×, resetting key support/resistance zones and potentially triggering stop‑loss cascades on the pre‑split levels. The sudden price uplift can draw attention from institutional desks that prefer higher‑priced securities, which may partially offset the loss of depth, but the net effect is usually a short‑run liquidity squeeze. Actionable take‑aways: monitor the pre‑effective‑date order flow for widening spreads, consider scaling in/out more slowly to mitigate slippage, and avoid relying on the pre‑split volume metrics for position sizing. Once the market stabilizes (typically 2‑3 sessions), liquidity should normalize, but be prepared for higher volatility and possible price gaps around the ratio change.