- DyDx is set to unlock 150 million DYDX tokens this week.
- This is expected to increase the circulating supply of DYDX by 30%, from 1.1 billion to 1.6 billion.
- The price of DYDX has plunged by almost 7% on the news of the token unlock.
- However, trading volumes have surged by 42% over the last day.
- DyDx could become bullish once again from here, but it will all be over if a break below $2.86 happens
According to a recent tweet from LookOnChain, the next few weeks are about to see a massive influx of cryptocurrencies.
In particular, DyDx, another popular decentralized exchange is gearing up to distribute 500 million DYDX tokens to its early backers in a few days, and the price of the ethDyDx is not having it.
Let’s see what’s up.
ethDyDx About To Flood The Market
According to LookOnChain, DyDx is set to distribute unlock 150M $DYDX sometime on 1 December.
In particular, the tokens, also known as ethDYDX, represent 30% of the total DYDX supply and are part of the dYdX Trading Inc. equity conversion.
LookOnChain also mentioned that this distribution of ethDYDX tokens to investors is expected to increase the circulating supply of DYDX by 30%, from 1.1 billion to 1.6 billion.
LookOnChain notes that the dYdX Foundation has already sent ethDYDX tokens to investor addresses including a16z crypto, Defiance Capital, and Polychain Capital at the time of writing.
However, the tweet mentions too, that many of these addresses have sold their tokens to the dYdX Chain network via the wethDYDX smart contract.
Lo0kOnChain says that more than 437.4 million DYDX tokens (worth nearly $1.5 billion) have been bridged, accounting for more than 40% of the total supply.
As anyone might have expected, the price of DyDx has not taken kindly to the news.
DyDx (ethDyDx) Plunges By 7%
According to CoinMarketCap, the news of the token unlock has triggered a sell-off in the DYDX market, as the price of the token plunged by almost 7% to $3.2, before normalizing at $3.4.
Interestingly, while its price and market cap have declined over the last day, investors appear to be hooked, as shown by the 42% surge in trading volumes over the last day.
According to the cryptocurrency’s chart on TradingView, DyDx became very bullish after breaking out of a descending wedge in mid-October this year.
However, the bulls soon ran out of strength at around $4.3.
DyDx started to plummet from this zone and soon found support around $2.86. However, its move to the upside from $2.86 has now been interrupted by the news of the upcoming token unlock, and DyDx has formed a new lower low.
The cryptocurrency has a chance to become bullish once again from here. However, it will all be over if a break below $2.86 happens, as a freefall scenario to $2.3 becomes inevitable.
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