dYdX [$DYDX] is among the best-performing altcoins of the day, with the price gaining over 18% in 24 hours.
The rally came even as the Philippines SEC warned the public about investing in dYdX. The regulator cited lack of registration in compliance with the countrys legal standards. But why was the altcoin trending higher？
Why is $DYDX up today？
There was an increase in speculative trading as capital rotated to altcoins. This resulted in a spike in daily trading volume of about 165%, to around $25 million. While the increase was significant, the amount of volume was small.
Additionally, there was a supply crunch over the past 30 days. The supply token trend declined from 399.2K $DYDX in late March to 355.4 coins at press time.
Source: MINTSCAN
A rising number of holders drove the tightening supply. There were more than 2,800 holders, with the most recent and biggest holdings at 164.4K $DYDX valued at $25.4K.
Bulls battle bears at $0.16
The daily rally manifested in the price charts, with bulls pushing $DYDX toward the $0.16 resistance. The altcoin had consolidated between $0.1279 and $0.1530 for more than ten days but seemed to be breaking out.
Even during this consolidation, the altcoin stayed above the SuperTrend indicator. This showed that bulls were in control and were gaining momentum. In fact, the Stochastic Momentum Index (SMI) reading was at 71.6, rising past the overbought zone.
Source: $DYDX/USDT on TradingView
Bulls are attempting to break above the daily high at $0.16, which sets $0.18 as their next problem area. From the huge green candles, it appeared bulls were taking control. Otherwise, $DYDX may revert to the sideways consolidation range.
Therefore, $DYDXs next price trajectory is dependent on which party, bulls or bears, wins the battle around $0.16.
Is the rally at risk？
Looking at the Long/Short Ratio to assess the trading activity of the altcoin in the derivative, it showed buying pressure was reducing. The metric dropped from a peak value of 1.2 to $0.82, indicating profit-taking.
More profit-taking could put the rally continuation at risk. The data showed the 10-day consolidation was dominated by selling rather than accumulation.
Source: CoinGlass
Altogether, $DYDX was having mixed signals despite the price continuing to hit higher levels. The daily pivot point at $0.13 acted as a near-term demand level, which, if broken, would invalidate the bullish outlook.
Final Summary
- $DYDX rallies 18% in the past 24 hours as supply shrinks and daily trading volume explodes.
- Bulls and bears were battling for control at $0.16, with buyers seemingly advantaged.