SNX hits multi-week highs as total value locked on Synthetix approaches $1 billion

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Synthetix (SNX) spiked to its three-week high on Monday in reaction to a market-wide upside correction led by Bitcoin (BTC) and other top-cap digital assets.

The Synthetix project’s native token reached $9.59 after rising four days in a row by up to 50%. That included a sharp 18.29% upswing in the previous daily session, sparked by Bitcoin’s climb above its key resistance level of $35,000. Altcoins tend to tail the flagship digital asset’s price trends.

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Synthetix and Bitcoin price moves in the recent sessions. Source: TradingView

But more factors were in play during SNX’s comparatively higher price boom. Its jump appeared as speculators returned to bet bullishly on the overall decentralized finance (DeFi) ecosystem. The seven-day adjusted timeframe saw almost every top DeFi coin posting double-digital gains, including Uniswap (~16%), Aave (~24%), Compound (39.37%), among many others.

SNX/USD surged about 31% in the previous seven days.

Synthetix was among the only DeFi coins in profits based on a 24-hour adjusted timeframe. Source: Messari

Ether (ETH), which hosts most DeFi projects atop its public blockchain, also saw its ETH token rising by more than 10% in the previous seven days.

VORTECS™ data turned bullish prior to new SNX price highs

Meanwhile, VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for SNX in early July, prior to the recent price rise.

The VORTECS™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historic and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.

VORTECS™ Score (green) vs. SNX price. Source: Cointelegraph Markets Pro

As seen in the chart above, the VORTECS™ Score flashed green on Sunday with a score of 64 with the price continuing to climb higher above $9.

Synthetix TVL approaches $1 billion

The 50% upside move in the SNX markets also pushed the total value locked inside Synthetix pools to $11 million shy of $1 billion. Nevertheless, as the TVL reserves rallied in terms of the United States dollar, they declined on the SNX token basis, dropping by almost 5 million units from the Thursday high of 116.25 million units.

SNX locked in Synthetix pools decline as price rallies. Source: DeFi Pulse

In detail, Synthetix is a decentralized synthetic asset platform that provides blockchain exposure to traditional assets, including currencies, commodities, stocks and indexes. The platform requires users to lock its native token, SNX, as collateral into its smart contracts to back its synthetic assets (Synths). These Synths track prices of various assets, which allow crypto users to trade peer-to-contract on Synthetix Exchange.

Additionally, users have to burn the portion of their Synths as debt when they wish to unlock their SNX. At its all-time high, in December 2020, the Synthetix smart contract had 168.37 million SNX tokens. The holdings fell to as low as 96.54 million SNX tokens in February 2021. Since then, the deposits have been rising, albeit not in a straight line.

Part of the reason behind rising Synthetix TVL could be higher annualized percentage yields (APY). For example, the SNX staking returned users with 39.30% APY as of Monday, using Synthetix’s inflationary supply model. Thus, SNX yields come out to be much higher than a traditional yielding asset (the U.S. 10-year Treasury note returning only were limited to 0.502%–1.778% in the previous 52 weeks).

SNX staking APY (with sUSD and SNX as base unit) is at 48.64% per annum. Source: Synthetics Official Website

SNX technical outlook

The latest SNX pump has pushed its prices above a classic technical range defined by $7 support and $8.50 resistance. Historically, SNX/USD has twice tested the area as resistance but was managed to break only once in December 2020–January 2021.

The Sythentix token eyes a breakout above $10.54. Source: TradingView

A breakout from the range puts SNX/USD en route to the next level of resistance near $10.54, which coincides with the 23.6% Fib line of the Fibonacci retracement setup drawn from a $27.172 swing high to $5.40 swing low. The $10.54 is near the SNX’s 50-day simple moving average (50-day SMA; the blue wave), creating a strong resistance confluence to cap the pair’s potential upside attempts.

Conversely, a breakdown below the $7–$8.50 range risks crashing SNX back to its previous sessional low of $5.40.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.