GMX, the governance and utility token that powers GMX, an Arbitrum-based decentralized exchange (DEX) for trading leveraged perpetual cryptocurrency futures, has plunged around 6.5% in the past 24 hours, according to CoinGecko.
That earns it the unwanted crown of being the worst-performing cryptocurrency in the top 100 by market cap during this time period.
GMX/USD fell to just over $50 a token on Friday, dipping below its 50-day moving average (DMA) just above $53 in the process, after losing control of its 21 DMA near $56 earlier in the week.
The latest dip has seen GMX drop to its lowest levels in over a month, with the cryptocurrency now down 18% compared to its early-month highs around $62.
There doesn’t seem to be any particular new catalyst behind the GMX price crash in recent days.
But a quick look DeFi Flame shows that the protocol’s locked trade value (TVL) in its smart contracts has been falling in recent months.
The protocol’s ETH-denominated TVL was just below 500,000 ETH, down from over 700,000 in February.
Meanwhile, its USD-denominated TVL was just below $1 billion, down from more than $1.26 billion at the start of the year.
The drop in ETH-denominated TVL suggests that the protocol is struggling to maintain crypto capital, which is not a good sign, and perhaps explains the recent underperformance of the GMX token.
Price Prediction: What’s Next for GMX (GMX)?
After the rejection of the 100 and 200 DMAs when GMX peaked at $60 earlier this month sent a strong bearish signal, GMX’s latest drop below the 50 DMA (meaning it is below all of its major moving averages) confirms that the bears are back in full control.
In the absence of any key support levels aside from the late June lows just above $50, a drop to the June lows of $41 looks very likely.
That could mean a downside in the region of 20% from current levels.
One saving grace for the GMX protocol could be the high yield currently offered to liquidity providers who mint the GLP token which provides liquidity for the protocol.
According to a recent tweet from GMX, this APY was the last 12.5% on Arbitrum.
That’s far more than crypto investors can get in most other corners of the decentralized finance (DeFi) market, such as staking ETH through a liquid staking protocol (yields are around 4%).
Crypto capital outflows could quickly return to inflows for GMX as DeFi investors seek higher returns.
Of course, LPG carries significant risk: its price is negatively related to the net gains of leveraged traders on the GMX platform, which means that if they start to make big profits, LPG investors could lose out.
Alternative to Meme Coin to consider
While the outlook for GMX (GMX) is bearish, traders should always look to diversify their token holdings.
Blue chip names like bitcoin (BTC) and ether (ETH) are always a good bet.
But for crypto investors with a higher tolerance for risk and a greater desire for short-term profit, meme coins could be the way to go.
The best way to make big profits in the meme coin market is to identify a meme coin with a relatively unknown token that still has a very low market cap, but has a good chance of breaking out.
Fortunately for high-risk tolerance meme coin investors, analysts at Cryptonews.com have identified the perfect project.
The Burn Kenny Coin is a new South Park-themed meme coin that launched its pre-sale on Thursday.
Despite only launching a day ago, the new project has already been able to sell $440,000 worth of $KENNY tokens.
Since the project only sells $500,000 worth of token, meme coin degenerators need to move quickly if they don’t want to miss out on the opportunity.
$KENNY has a high probability of seeing an explosive upside when it launches on decentralized exchanges (DEXs), which will likely happen early next week.
That is because:
- The limited pre-sale availability of the token means that pent-up demand and FOMO are likely to carry over to the DEX launch.
- The pre-sale values the token at a small market cap of $875,000 (if you factor in the 30% token burn), leaving plenty of room for explosive upside.
- 30% of the token supply has already been committed to a three-month DEX liquidity lock to ensure smooth trading conditions, as can be verified at team finances.
- The marketing team behind the Burn Kenny Coin also planned the SpongeBob (SPONGE), Thug Life (THUG) and Mr Hankey (HANKEY) tokens, all of which saw 3x-100x bombs. His efforts are already paying dividends, with $KENNY ranking high in the crypto press.
Get $KENNY before the pre-sale ends
Since the project has now raised nearly $450,000, the Burn Kenny Coin presale could sell out in a matter of hours.
Head over to the Burn Kenny website now, where you can click to become a supporter of the Twitter account and join the telegram channelso you will be the first to know when the pre-sale ends and about the imminent launch of DEX.
To buy $KENNY in pre-sale, you will need Ethereum.
Plug your wallet into the Burn Kenny Coin website Set how much you want to buy, approve the connection and purchase, and you’re done.
Return to the site and claim your tokens after the pre-sale has concluded.
Buy $KENNY on the sneak before the rest of the world wakes up, and you could get the 5x – or more – easier chance on crypto.
Buy Kenny Coin here
Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all your capital.
