GMX Drops 24% in 1 Month, Whales Rapidly Selling: What’s Going On?
12 August 2023 - 3:00AM
NEWSBTC
GMX, the native token powering GMX, a decentralized perpetual
exchange for trading complex crypto derivatives, is under intense
selling pressure when writing on August 11. Trackers show that the
governance token is down 7% on the last trading day, pushing
monthly losses to 24%. This downturn has seen prices tumble close
to $40, a critical support level last printed in January and June
2023. Whales Dumping, Prices Fall Despite this setback,
DeFiLlama’s data is stable as GMX’s Total Value Locked (TVL)
remains over $534 million. Most of the trading platform’s liquidity
is locked in Arbitrum, a layer-2 scaling solution for Ethereum.
Additionally, another portion is locked on Avalanche, a
fourth-generation Ethereum-compatible smart contract platform
focused on decentralized finance (DeFi). The sell-off on August
11 coincides with actions by GMX “whales.” According to
Lookonchain data, four whales sold 62,274 GMX worth $3 million.
Address “0xb824” liquidated 19,786 GMX, translating to 514 ETH, and
“0xa38a” sold 11,667 GMX for 305 ETH, losing $50,000 in the
process. Meanwhile, “0X85b7” sold 20,000 GMX for 510 ETH, and
“0x0b80” mirrored this move, dumping 10,820 GMX. Related Reading:
Curve Finance Resurgence: 70% Of Stolen Funds Recovered, Redemption
On The Horizon Whales are selling amid a constant decline in TVL in
DeFi. This contraction can be traced to the general cool-off from
late 2021, when crypto prices peaked before dropping in 2022,
crashing on-chain activity, especially in DeFi. At spot rates, it
is changing hands at $46, an almost 50% decline from $91 registered
in Q2 of 2023. Even so, the token is up nearly 4X from its all-time
low. Whales’ action, nonetheless, could send ripples of uncertainty
throughout the GMX and DeFi communities. Crypto traders actively
keep track of whale activity. Usually, when they sell, as was the
case today, it could sow fear, leading others to follow suit,
heaping more pressure on prices. GMX Launches v2 Beta On August 6,
GMX released the v2 version in beta on Arbitrum and Avalanche. The
exchange said this version introduces several enhancements,
including support for more assets, including XRP. With v2, users
can also utilize diverse collateral types for trading positions
while trading more quickly with reduced fees and lower
slippage. Related Reading: Did XRP Price Really Hit $50 On
Gemini Exchange With v2, the exchange adds, is the introduction of
isolated pools for liquidity providers to customize their exposure
to preferred tokens. This version also incorporates augmented
incentives for balancing open interest, offering a strategic avenue
for hedging pools against trader profit fluctuations. Feature
image from Canva, chart from TradingView
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