Synthetix Network Token DeFi Dominance Tanks Amid Looming Breakdown

By John Isige
October 16, 2020 Updated October 16, 2020
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  • Synthetix declines on hiatus amid low volatility and volume.
  • Recovery is likely to hit a snag at the 21-day SMA, which could send SNX back to the drawing board.

The decentralized finance (DeFi) craze appears to have hit pause. It seems this the time tokens in the sector have to prove their worth to investors. While the DeFi bubble is far from bursting, sustainability is of greater importance not only to the projects themselves but also to the investors in the ecosystem.

Synthetix Network Token (SNX) is currently the seventh-largest DeFi token in the industry. It has a total value locked of roughly $615 million. Over the last 24 hours, the project has lost more than seven percent of these funds, suggesting that SNX’s dominance in DeFi is dropping. At the moment, UniSwap sits at the helm of the sector with approximately $2.8 billion. Maker comes second with about $2 billion while trailed by WBTC with $1.2 billion locked in its network.

Descending triangle spells doom for Synthetix

Synthetix is trading at $3.9 at the time of writing. Recently, the token hit a barrier at $4.8 following a substantial recovery from support established at $3.6. Also limiting the upward movement was the descending triangle resistance. In addition, the 50 Simple Moving Average holds ground marginally below $5, intensifying the pressure on SNX.

The Relative Strength Index (RSI) suggests that the DeFi token is taking a hiatus but could resume the uptrend. Sideways trading will take precedence in the coming sessions as the RSI levels above 70.

SNX/USD daily chart

SNX/USD price chart
SNX/USD price chart by Tradingview

The probability of SNX resuming the uptrend is still high, especially now that it is not oversold and trading within the confines of a symmetrical triangle pattern. SNX could step about the $4 hurdle but may be rejected at the 21 SMA, in turn, resuming the uptrend and validating the triangle breakdown. Support at $3 is most likely to hold while gains above the triangle resistance could sabotage the bearish outlook altogether.

Synthetix Intraday Levels

Spot rate: $3.9

Relative change: 0.035

Percentage change: 0.9%

Trend: Bullish bias

Volatility: Low

John is a talented writer with over two years of experience actively contributing to the cryptocurrency industry by providing credible, interesting and easy to read the content. His main focus is on cryptocurrency price analysis and industry news coverage. Lets follow him on Twitter at @jjisige
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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