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dYdX [$DYDX], the native token of the decentralized trading platform, has landed among the top gaining assets in the market.
In fact, on-chain metrics including trading fees and total value locked have remained largely unchanged according to DefiLlama data, with sentiment staying flat.
The main growth has been driven by off-chain activity. However, at press time, chart analysis revealed that the rally now faces a credible risk of a near-term pullback at a key technical level.
$DYDX hits channel resistance
The continuation of $DYDX’s northbound rally faced a significant hurdle as the asset hit the upper boundary of the ascending channel pattern it has been trading within.
The channel consists of two parallel upward-trending lines serving as support and resistance respectively, with price oscillating between them in an upward range.
At press time, $DYDX had hit the upper resistance line of this channel, meaning the sell pressure that typically builds at this level could force the asset lower towards the channel support if it holds.
The momentum picture, however, has been constructive.
$DYDX overcame a key structural supply zone that previously acted as a major obstacle to price growth. Clearing this level adds weight to the case for a breakout above the channel resistance, rather than a rejection from it.
A/D reaches 40.8 million as MA Ribbon prints a bullish crossover
Market indicators seemed to be supporting the probability of a breakout to the upside, rather than a rejection at resistance.
The Accumulation/Distribution indicator, for instance, highlighted rising accumulation, with total volume hitting 40.8 million in $DYDX at the time of writing.
Traders have been actively adding to their positions, and the volume building behind this accumulation lends conviction to the bullish structure forming on the charts.
At press time, the Moving Average Ribbon flashed the clearest bullish signal yet. With the 20-day MA sitting above the 50-day, 100-day, and 200-day averages in a bullish crossover formation, the short-term average seemed to be leading the longer-term ones – A configuration that reflected strong and building momentum.
The gap between the 20-day MA and the longer-term averages implied that the upward move might carry meaningful conviction. And, a sustained upswing alongside sustained accumulation would confirm investors are actively contributing to extending the rally.
What are Spot and Perpetual market buyers up to?
Finally, both the Spot and Perpetual markets have been reflecting a strong structural setup for an ongoing bullish move in $DYDX.
In fact, Spot market data revealed that traders accumulated $616,640 worth of $DYDX over the last four days, reflecting consistent buying interest at press time levels.
The Perpetual market seemed to mirror this trend too, with traders expanding leveraged capital to approximately $48.68 million in Open Interest. All while OI-weighted funding data confirmed that long positions accounted for most of this capital.
With both Spot and Perpetual markets holding a bullish position and accumulation building steadily, the conditions for $DYDX to push further into an extended upswing might just strengthen.
Final Summary
- The Moving Average Ribbon revealed a bullish crossover with the 20-day MA leading, while A/D rose to 40.8 million.
- $DYDX has been testing the upper channel resistance as Open Interest climbed to $48.68 million with positive funding.