GMX, the native token of the decentralized perpetual exchange for trading complex crypto derivatives, has experienced a significant drop of 24% in just one month, accompanied by a rapid sell-off by whales. This decline has brought GMX prices close to a critical support level last seen in January and June 2023. Despite this setback, the Total Value Locked (TVL) of GMX remains stable at over $534 million, with most of the liquidity locked in Arbitrum and Avalanche. The recent selling activity by whales could potentially generate uncertainty within the GMX and DeFi communities, as their actions often influence other traders’ behavior. Furthermore, GMX has recently launched its v2 beta version, introducing various enhancements and additional features to improve user experience on the platform.
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Whales Dumping, Prices Fall
The native token of GMX, a decentralized perpetual exchange for trading complex crypto derivatives, is currently experiencing intense selling pressure. As of August 11, the token has seen a decline of 7% in its price on the last trading day, resulting in a monthly loss of 24%. This downturn has caused prices to drop to around $40, a critical support level that was last seen in January and June 2023.
Despite this setback, GMX’s Total Value Locked (TVL) remains relatively stable. According to trackers, GMX’s TVL is still over $534 million, with most of the liquidity being locked in Arbitrum, a layer-2 scaling solution for Ethereum. Another portion of the liquidity is locked on Avalanche, a fourth-generation Ethereum-compatible smart contract platform focused on decentralized finance (DeFi).
The decline in GMX prices on August 11 coincides with actions taken by GMX “whales.” Data from Lookonchain shows that four whales sold a total of 62,274 GMX tokens, equivalent to $3 million. One of the addresses, “0xb824,” liquidated 19,786 GMX, which translates to 514 ETH. Another address, “0xa38a,” sold 11,667 GMX for 305 ETH, resulting in a loss of $50,000. The remaining two addresses, “0X85b7” and “0x0b80,” sold 20,000 GMX and 10,820 GMX respectively.
These whale sell-offs are occurring during a period of TVL contraction in the DeFi space. This contraction can be attributed to the overall cooling off of the crypto market since late 2021, when prices peaked before experiencing a significant drop in 2022. This drop in prices has had a substantial impact on on-chain activity, particularly in DeFi. As of now, GMX is being traded at $46, which represents a nearly 50% decrease from its price of $91 in Q2 of 2023. However, it is worth noting that the token is still up almost 4 times from its all-time low.
The actions of these whales could potentially create uncertainty within the GMX and DeFi communities. Crypto traders often closely monitor whale activity, and when whales sell off their tokens, it can instill fear in other traders, leading to a cascading effect of more selling and increased pressure on prices.
GMX Launches v2 Beta
On August 6, GMX released the v2 beta version on both Arbitrum and Avalanche. This new version introduces several enhancements to the platform. One notable enhancement is the support for more assets, including XRP. With the v2 version, users can now trade more quickly with reduced fees and lower slippage. Additionally, this version allows users to utilize diverse collateral types for trading positions.
Another significant addition in the v2 version is the introduction of isolated pools for liquidity providers. This feature enables liquidity providers to customize their exposure to preferred tokens, providing them with more flexibility in managing their assets. Furthermore, the v2 version incorporates augmented incentives for balancing open interest, offering a strategic avenue for hedging pools against trader profit fluctuations.
With the launch of the v2 beta version, GMX aims to enhance the trading experience for its users and provide them with more options and opportunities in the ever-evolving DeFi space.
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GMX’s native token has been experiencing significant selling pressure, resulting in a notable price decline. This pressure is attributed to the selling activities of GMX whales and the overall contraction of TVL in the DeFi space. However, the release of the v2 beta version brings new enhancements and features to the GMX platform, aiming to improve the trading experience and attract more users.
As with any investment, it is crucial to carefully evaluate the risks associated with trading GMX tokens and be aware of the potential impact of market dynamics on token prices. The GMX and DeFi communities will be closely monitoring the situation as it unfolds, observing the actions of whales and assessing the consequences on the broader ecosystem.