SNX hits multi-week highs as Synthetix’s total value approaches $ 1 billion

585
SHARES
3.2k
VIEWS

You might also like

SNX rose to its three-week high on Monday in response to a market-wide upward correction led by Bitcoin (BTC) and other top digital caps.

The Synthetix Project native token hit $ 9.59 after rising up to 50% for four days in a row. That included a strong 18.29% rebound in the previous day’s session, triggered by Bitcoin’s rise above its key resistance of $ 35,000. Altcoins tend to follow the price trends of the flagship digital asset.

The price of Synthetix and Bitcoin has moved in the last few sessions. Source: TradingView.com

But even more factors played a role during the comparatively higher price boom of the SNX. His jump appeared as speculators returned to bet optimistically on the entire decentralized finance (DeFi) ecosystem. In the seven-day adjusted timeframe, almost every top DeFi coin saw double digital gains including Uniswap (~ 16%), Aave (~ 24%), Compound (39.37%), among others.

The SNX / USD was up about 31% in the past seven days.

Synthetix was among the only DeFi coins in earnings based on an adjusted 24 hour timeframe. Source: Messari

Ether (ETH), which hosts most of the DeFi projects on its public blockchain, also saw its ETH token increase by more than 10% in the past seven days.

VORTECS ™ data turned bullish ahead of new SNX price highs

Meanwhile, Cointelegraph Markets Pro’s VORTECS ™ data began to see a bullish outlook for the SNX in early July, ahead of the recent price hike.

The VORTECS ™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historical and current market conditions derived from a combination of data points including market sentiment, trading volume, current price movements and Twitter activity.

VORTECS ™ Score (green) vs. SNX price. Source: Cointelegraph Markets Pro

As can be seen in the graph above, the VORTECS ™ Score flashed green on July 4th at a score of 64, with the price continuing to climb above $ 9.

Synthetix TVL is approaching $ 1 billion

The 50% uptrend in SNX markets also pushed the total value of the Synthetix pools to just under $ 1 billion to $ 11 million. However, on a SNX token basis, as TVL reserves rebounded relative to the US dollar, they fell nearly 5 million units from the July 1 high of 116.25 million units.

SNX, which is included in Synthetix pools, goes down as price increases. Source: DeFi Pulse

In detail, Synthetix is ​​a decentralized synthetic assets platform that provides blockchain exposure to traditional assets, including currencies, commodities, stocks and indices. The platform requires users to include their native SNX token as security in their smart contracts to secure their synthetic assets (synths). These synths track the prices of various assets that allow crypto users to trade peer-to-contract on the Synthetix Exchange.

Additionally, if users want to unlock their SNX, users will have to burn the part of their synths as debt. At its all-time high in December 2020, Synthetix’s smart contract had 168.37mm SNX tokens. The stocks decreased to 96.54 SNX tokens in February 2021. Since then, deposits have increased, albeit not in a straight line.

One reason for the rising Synthetix TVL could be higher annualized percentage returns (APY). For example, on Monday, SNX staking returned users with 39.30% APY, using Synthetix’s inflationary supply model. Thus, the SNX yields are much higher than those of a traditional yield investment (the yield on 10-year US Treasuries has been capped at 0.502-1.778% for the past 52 weeks).

SNX Staking APY (with sUSD and SNX as the base unit) is 48.64% per year. Source: Synthetics Official Website

Technical outlook for SNX

The latest SNX pump has driven its prices above a classic technical range defined by a $ 7 support and a $ 8.5 resistance. Historically, SNX / USD has tested the area twice as resistance but was only able to break through once in December 2020-January 2021.

The Sythentix token sees a breakout above $ 10.54. Source: TradingView.com

A break out of the range puts SNX / USD on its way to the next resistance level near $ 10.54, which is the 23.6% Fib line of the Fibonacci retracement setup from a 27.172 swing high to $ 5.40 -Swing low coincides. The $ 10.54 is near the 50-day SNX 50-day moving average (the blue wave), creating a strong resistance confluence to limit the pair’s potential upside attempts.

Conversely, breaking below the $ 7-8.5 range risks plunging the SNX back to its previous session low of $ 5.40.

The views and opinions expressed are those of the author only and do not necessarily reflect the views of Cointelegraph.com. Every step of investing and trading involves risk, so you should do your own research when making a decision.