DYDX Up 80% in One Week: What's Driving the DEX Token Rally?
The eponymous token of the decentralized exchange dYdX rose almost 80% this week, as traders evaluated its potential in the face of the recent ban on cryptocurrency transactions in China.
The price of DYDX hit a new high of $ 26.50 on FTX, after trading at around $ 13 a week ago. China’s ban was an apparent boost for the decentralized exchange (DEX ) dYdX, which offers its users swaps, margin and spot trading, as well as loan and borrowing services.
Owning DYDX gives the right to propose and vote on changes in dYdX Layer 2 protocol. Those who commit their DYDX to staking receive rewards by depositing them in DEX liquidity pools . Users also benefit from receiving a discount on trading fees that are based on the size of their DYDX bookings.
dYdX distributed (via airdrop) the DYDX tokens among its users based on their activity on its platform. The lowest tier, which had traded a minimum amount of USD 1 on the exchange, received 310 DYDX. For their part, those who traded digital assets worth more than one million dollars in dYdX received 9,529 tokens.
As a result, many of the traders who hoarded their free DYDX tokens earned more than $ 245,000 c hen the cryptocurrency reached its All-time high of $ 26.50 on Wednesday. One of the traders (who received DYDX for having more than one dYdX account) earned about $ 900,000.
My free $ DYDX airdrop is worth $ 900,000. Good morning.
My free DYDX airdrop is worth $ 900,000. Good morning.
Although the price corrected more than 10% subsequently, its daily returns remained positive, which demonstrates the intention of traders to speculate more on the bullish bias of DYDX in the coming days.
The FUD China attracts new users
One of the main reasons for its upward trend was China. The People’s Bank of China published a notice on September 24 that prohibited all types of transactions related to cryptocurrencies. In response, crypto assets fell, including major assets Bitcoin ( BTC ) and Ether ( ETH ).
But among the most affected cryptocurrencies are Huobi Token (HT) and OKB, native tokens of centralized exchanges Chinese, Huobi and OKEx, respectively. While the price of HT lost 52.64% two days after the announcement of the PBoC, the price of OKB fell by as much as 43.87% in the same period.
Daily chart of OKB / USD pairs and HT / USD. Source: TradingView.com
On the other hand, dYdX volumes reached all-time highs, which suggests that traders based in China are moving to platforms that do not have centralized intermediaries and do not practice know-how procedures. to your customer (KYC).
Daily chart of the DYDX / USD pair. Source: TradingView.com
Technical configuration
DYDX price has the potential to go higher, based on a technical support indicator.
Nicknamed as bullish pennant , the bullish continuation pattern arises when an asset consolidates down within a descending channel after a strong upward movement. In doing so, it attempts to break to the upside from the bearish structure.
When it does, the price tends to rise with a length equal to the scale of the previous uptrend. From the looks of it, DYDX checks all the boxes when it comes to forming a bullish pennant on its 15-minute chart, as shown below.
15-minute chart of the DYDX pair. Source: TradingView.com
As a result, DYDX is now targeting a target beyond $ 27.
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