Synthetix (SNX) Hits Record High amid DeFi Correction; Here’s Why?
Synthetix’s native token SNX emerged victorious on the day its rival decentralized finance tokens turned lower.
The SNX-to-dollar exchange rate hit a fresh record high of $8.68 on Wednesday as a flurry of uplifting fundamentals prompted traders to increase their bids on the pair. That included the introduction of a new staking platform.
Say hello to the brand new dApp for staking on Synthetix! https://t.co/o4ks9nt8lb
The new interface has been rethought from the ground up to provide the best staking experience for SNX holders. 1/https://t.co/wcPTmDv8nW
— Synthetix ⚔️ (@synthetix_io) December 22, 2020
A Bullish Expansion
Sythentix’s proprietary dapp went live on Tuesday, paving the way for people to stake their SNX holdings to earn attractive yields. Traders typically increase their short-term bullish bias on DeFi projects that attempt to expand their service portfolio. Earlier, YFI, the governance token of decentralized aggregator platform Yearn.Finance also surged twofold after the protocol ventured into lending and decentralized exchange services.
The SNX/USD exchange rate, meanwhile, received further boost from Coinbase Pro. The US-based crypto exchange listed the token on its trading platform last week after months of speculation. Overall, the cost to purchase one SNX token surged almost twofold in the last eleven days amid the overall cryptocurrency market euphoria.
Synthetix continues its uptrend despite downside correction across the DeFi space. Source: SNXUSD on TradingView.com
In comparison, other DeFi tokens underperformed. SNX surged by about 19 percent in the previous 24 hours while YFI, UNI, and AAVE fell within the range of 3-7 percent.
“Potentially related to SNX, SNX volumes have shot through the roof over recent days, with Binance, OKEx, and even decentralized exchanges like SushiSwap seeing large increases in volumes for the coin,” noted Nick Chong in the newsletter Alpha Alarm, also co-authored by analysts Joseph Young and Cole Peterson.
“SNX is often seen as a DeFi coin that is “slept on,” and may thus be rallying as the market corrects itself,” he added.
What’s Next for SNX?
The SNX/USD exchange rate is fueling higher on short-term bullish fundamentals. But a recovery across other DeFi assets could prompt speculators to dump their profitable SNX positions to seek opportunities in low-priced tokens.
The narrative fits the technical description of the Sythentix token’s four-hour chart. SNX/USD is forming an ascending broadening wedge after a recent bullish movement. Technically, that should reverse the uptrend if the price breaks below the structure’s support in the coming sessions. In 80 percent of cases, the exit is bearish.
Synthetix trade setup as per its ascending broadening wedge setup. Source: SNXUSD on TradingView.com
The downside target after the wedge breakout is near $4.12.