- Synthetix price has rebounded sharply in the past few months.
- This rebound happened after it tested the key support at $3.45.
- It could be a dead cat bounce, meaning that more sell-off is likely.
The Synthetix price has rebounded sharply in the past two days as investors have bought the dip. The SNX token is trading at $4.56, which is about 40% above the lowest level this month. Its market capitalization has jumped to 930 million, pushing its ranking to above 100 for the first time in months.
Synthetix rebounds
Synthetix is one of the biggest blockchain projects from Australia. At its peak, it was one of the most popular coins in the world, which pushed its ranking to below 50. In the past few months, however, things have not gone well for the platform.
For starters, Synthetix is a leading platform that is in the derivatives trading industry. Its platform enables developers to build synthetic assets that can be traded in the decentralized finance industry. Its synthetic assets are known as synths.
These synths are built to track real assets like currencies, stocks, and commodities. For example, sUSD tracks the US dollar while sAAPL tracks the performance of Apple shares. sUSD has a market cap of over $95 million while sBTC has a value of about $173 million.
Similarly, sETH tracks the performance of Ethereum using price feeds provided by oracles. Synthetix uses price feeds by Chainlink.
One of the reasons why the Synthetix price has dropped sharply is that the overall total value locked in the ecosystem has been in a downward trend. After peaking at about $2.5 billion in February 2021, the TVL has dropped to about $982 million today.
It is unclear why the SNX price has bounced back this week. The likely reason is that investors are buying the dip since most cryptocurrencies have dropped sharply. Another possible reason is that the performance in line with the performance of other coins. Besides, Bitcoin has managed to rise above $42,000 while the total market cap of cryptocurrencies has jumped to over $2 trillion.
Synthetix price prediction
The daily chart shows that the Synthetix price has been in a strong bearish trend in the past few days. It has managed to move below the 25-day and 50-day moving averages. A closer look shows that the SNX price rebound happened after it found a strong support at $3.44. In most cases, financial assets tend to rise initially after falling to a key support level.
Therefore, there is a likelihood that Synthetix will retreat in the near term since this rebound seems to be a dead cat bounce. The bearish trend will be confirmed if it falls below $3.44.
