The PYTH price surged more than 100% following the announcement of a major partnership with the U.S. government. At the same time, large investors are beginning to accumulate the token. Will this momentum persist, or has it peaked?
Summary
- PYTH price jumped over 100% after being chosen by the U.S. government as an oracle partner for GDP data verification.
- The token’s price has surpassed a descending trendline it was under since February.
As reported by crypto.news, Pyth Network (PYTH) surged by 118% to an intraday peak of $0.243 on Friday morning, Asia time, then settled at $0.227 by press time. At this level, it is 167% above its low for the year.
The increase occurred within a high-volume trading context. The trading volume for the PYTH token spiked nearly 8,600% in the past 24 hours, indicating robust demand from traders that contributed to its rally.
The token has also gained significant interest from derivatives traders. Open interest reached an all-time high of $188.34 million, markedly up from about $40 million the day before. Furthermore, a long/short ratio exceeding 1 shows that many traders are anticipating further price gains, bolstering the positive sentiment around the rally.
Consequently, Pyth Network’s market cap has expanded to over $1.3 billion, placing it among the top 100 crypto assets by market capitalization according to CoinGecko.
The price jump followed the announcement from the project’s team that the U.S. Department of Commerce selected the network as one of its oracle partners to validate and publish economic data on the blockchain.
This news has also rekindled interest from whale investors. As per data from Nansen, whale wallets increased their holdings of PYTH tokens by 14.5% in the past week, rising from 42.97 million to 49.21 million today.
An additional factor bolstering the token’s increase is the decline in exchange-held balances. Data from Nansen shows combined exchange balances now at 908.75 million, a decrease of 8% from seven days ago.
This reduction in exchange balances suggests that investors might be withdrawing tokens from exchanges, lessening immediate selling pressure. With fewer tokens available for trading, this is typically interpreted as a bullish signal, indicating enhancing holder confidence and potential for further price increases.
The convergence of these bullish elements could continue to uplift investor sentiment, potentially driving further price escalation in the near term.
On the daily chart, PYTH has notably broken through a descending trendline established since early February, marked by a series of lower highs and lows. This breakout signifies a change in market structure and hints at a potential trend reversal.
After the breakout, the price has crossed the 23.6% Fibonacci retracement level at $0.192, supporting the bullish outlook.
The token is currently trading above all primary simple moving averages, including the 50-day and 200-day SMAs, typically interpreted as a strong bullish indicator. This arrangement suggests that both short- and long-term momentum favors the bulls.
Moreover, the Supertrend indicator has turned green and aligned below the price level, further affirming a buy signal.
Given this setup, the next immediate resistance target is at $0.26. A clear break above this level could pave the way for a move towards $0.31, aligning with the 50% Fibonacci retracement level and potentially serving as the next significant resistance zone.
Conversely, if the token is unable to maintain support above $0.19, it could fall back toward $0.10, a former strong support level.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
