SNX hits multi-week high as Synthetix total value hits $ 1 billion

Synthetix (SNX) rose to a three-week high on Monday as the crypto market showed signs of recovery.

The native token of the Synthetix project has reached USD 9.59 after four consecutive days with an increase of up to 50%. That includes a steep 18.29% surge in the previous day’s session, due to Bitcoin climbing above its key resistance of $ 35,000. Altcoins tend to move in line with the price trend of standard cryptocurrencies.

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SNX / USD daily chart | Source: TradingView

But more factors play a role in SNX’s recovery. The leap will come when traders actively rely on the decentralized finance (DeFi) ecosystem again. Most of the top DeFi tokens have outperformed in the past 7 days, including Uniswap (~ 16%), Aave (~ 24%), Compound (39.37%) and many more.

SNX / USD is up about 31% in seven days.

Ethereum (ETH), where most of the top DeFi projects are concentrated, also saw more than 10% growth over the past seven days.

Synthetix TVL hits $ 1 billion

SNX’s price movement of over 50% has brought the total value of Synthetix pools to $ 1 billion with 110 million SNX locked. However, despite the surge in TVL’s dollar value, it is down nearly 5 million tokens on a SNX token basis from last Thursday’s high of 116.25 million tokens.

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SNX locked in Synthetix pools will decrease as the price recovers | Source: DeFi Pulse

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

Also, if users want to unlock their SNX, users will have to burn some of their synths as debt. At an all-time high, Synthetix’s smart contract had 168.37 million SNX tokens in December 2020. The inventory decreased to 96.54 million SNX tokens in February 2021. Since then, deposits have increased, if not in a straight line.

One reason Synthetix TVL was up could be due to its higher annualized percentage rate of return (APY). For example, the SNX staking feature earned users 39.30% APY on Monday thanks to Synthetix’s inflationary offering model. As a result, the SNX yield is much higher than that of a traditional yield investment (10-year US Treasuries were only 0.502% to 1.778% for the last 52 weeks).

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

Technical outlook from SNX

The latest pump pushed the SNX price above a zone of $ 7 to $ 8.50. Historically, SNX / USD has confirmed this area as resistance twice before breaking above it in January 2021.

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SNX / USD daily chart | Source: TradingView

This move may propel the price towards the next resistance near $ 10.54, which coincides with the 23.6% Fib level of the retracement from the high of $ 27.172 to $ 5.40. $ 10.54 is also near the 50-day SMA (wave in blue) creating a strong confluence of resistance that could thwart the pair’s potential upside attempt.

Conversely, if the SNX breaks below the range of $ 7 to $ 8.50, there is a risk that the SNX will fall back to its previous low of $ 5.40.

Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

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According to Cointelegraph

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