What’s the driving force behind dYdX’s 80% weeklong profit? | Bitcoin magazine
DYDX, the native token of the decentralized exchange (DEX) dYdX, rose nearly 80% in a week as traders believe it will benefit from the decision to categorize all crypto transactions as China’s “illegal”.
DYDX price hit a new all-time high (ATH) of $ 27.8 after trading at around $ 13 a week ago. The Chinese ban is an obvious boost to the dYdX exchange, which is offering users perpetual, margin and spot trading, as well as credit and credit services.
Holding DYDX gives the holder the right to propose changes to the Layer 2 protocol of dYdX and to vote on them. DYDX stakers receive rewards by depositing funds into dYdX’s appropriate liquidity staking pools. Users also benefit by receiving transaction fee discounts based on the size of their DYDX reserve.
DYDX was dropped from the air on 64,000 users based on their activity on dYdX. The lowest level that is traded with a minimum of $ 1 gets 310 DYDX. Meanwhile, those who traded up to over a million dollars received 9,529 DYDX.
As a result, many traders were making nearly $ 265,000 when the price hit $ 27.8 this morning (September 30th).
Although DYDX price has corrected and is currently trading at $ 26.7, its daily returns are still positive, which shows the intent of traders to invest more in the bullish trend of the DYDX coin in the upcoming sessions.
China FUD attracts new users for dYdX
One of the main reasons for the upward trend in DYDX price is China. The People’s Bank of China (PBoC) released a notice on September 24th banning all types of crypto transactions, which led to the crash of the entire crypto market, including bitcoin and bitcoin.
Some of the hardest hit altcoins are HT and OKB, native tokens of the centralized exchanges (CEX) from China. While the HT price fell 52.64% two days after the PBoC was announced, the OKB price fell 43.87% over the same period.
HT and OKB fell when Huobi and OKEx closed OTC deals in China and stopped accepting Chinese users on their platforms.
Daily price chart of OKB and HT | Source: TradingView
On the flip side, dYdX trading volume has exploded to record highs, most likely because Chinese traders are shifting their business to decentralized and KYC-free exchanges.
dYdX. Trading volume | Source: Token Terminal
As Cointelegraph reported on Monday (September 26th), the trading volume of dYdX reached $ 4.3 billion, surpassing Coinbase by 15% for the first time.
DYDX still has upside potential based on a technical indicator.
A bullish expansion pattern, also known as the bull flag, occurs when the asset consolidates downward within a descending channel after a strong upward move. Once there, it attempted a bullish break out of the bearish structure.
When the bull flag appears, the price tends to rise by the size of the previous uptrend. So the DYDX gained enough momentum when it formed a bullish flag on its 15-minute chart, as shown below.
15 Minute Frame DYDX Price Chart bullish flag appears | Source: TradingView
DYDX is currently moving towards $ 27 and up.
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According to Cointelegraph