dYdX price soared 35% on Tuesday to record an intra-day high of $3.960.
The ethDYDX token continued to push higher today and touched $4.08 at 6 a.m. EST today. Trading volume is also up a remarkable 185% on the day as the asset gains attention ahead of its cliff token unlock.
How The Scheduled DYDX Cliff Token Unlocks Is Driving dYdX Price
Based on data from the Token Unlocks app, the dYdX ecosystem had a cliff token unlock scheduled for November 21. On this date, 2.16 million DYDX tokens worth approximately $8.65 million were supposed to flood the markets in a cliff unlock.
A cliff unlock is when the project introduces a huge supply in the circulation of the tokens in a single day. It varies from linear unlocks, where the ecosystem unlocks a fixed supply of tokens daily for a specific period.
Token unlocks are typically bearish catalysts because the chunk of tokens flushed into the market all at once tends to cause the price to crash amid increased supply and, therefore, a drop in demand. It follows the typical supply-demand dynamics.
Ahead of token unlocks, token holders tend to boost the asset’s price so that they can book profits before the price falls.
DYDX Value Prognosis With Multiple Bullish Fundamentals To Steer dYdX Price
After a 35% climb, the dYdX price shattered past a supply zone, converting it into a bullish breaker from $2.892 to $3.154. The upside potential remains alive for the cryptocurrency, even though the DYDX token is massively overbought. This is shown by the position of the Relative Strength Index (RSI) above the 70 level.
With this outlook, traders with open longs should keep them open as the price could still increase. Those looking to open new positions should be wary because a correction may occur.
Meanwhile, the dYdX price enjoys robust downward support offered by the weekly 100-day Moving Average (MA) at $2.822. Increased buying pressure could send it to the $5.000 psychological level.
The Awesome Oscillator shows the bulls are still in control. This is indicated by the AO holding in the positive territory with its histogram bars flashing green.
Conversely, profit booking could send the dYdX price south, likely flipping below the bullish breaker and losing the support due to the weekly 100 MA.
In the dire case, the slump could extend into the demand zone, ranging from $2.189 to $2.372. A break and close below its midline, marked by the daily 50 MA at $2.252, would confirm the continuation of the downtrend.
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