Though GMX shows signs of improvement, this is why HODLers should be cautious

• GMX noticed large development when it comes to quantity.
• Nonetheless, indicators painted a bearish image for the token.

GMX has been capitalizing on the current bullish sentiment of the market and has seen fairly some development. One indicator of its progress has been its efficiency on the Avalanche [AVAX] community. In response to a 20 February tweet, it was noticed that the variety of customers utilizing GMX on Avalanche had doubled.

1// @GMX_IO trade exercise and efficiency on #Avalanche proper now could be simply insane.

What is the information saying?

Because the begin of the 12 months (01/01/2023)

There may be now over double the variety of customers utilizing GMX on #Avalanche pic.twitter.com/JHOJLlr2pW

— Ommiii🔺 (@Ommiii_) February 20, 2023

Learn GMX’s Worth Prediction 2023-2024

A excessive variety of customers indicated that the adoption of GMX had elevated materially. The curiosity round GMX was not solely aiding the perpetual contract protocol but additionally the networks that it was current on.

Together with the variety of customers, the general quantity on the community had elevated as effectively. In response to the aforementioned tweet, GMX’s quantity had elevated by 250%.

One purpose for the rising quantity can be the excessive variety of merchants on the platform. In response to Dune Analytics’ information, the general variety of merchants on the protocol had elevated immensely over the previous few months. A excessive variety of merchants on the protocol affected the general quantity and liquidity on the platform.

A majority of those merchants held lengthy positions. In response to Dune Analytics’ information, the proportion of lengthy positions on the platform was 62.1%. Alternatively, the proportion of quick positions on the platform was 37.1%. This showcased the general optimism of the crypto market and customers of the platform.

Supply: Dune Analytics

Nonetheless, whereas the optimism of the merchants continued to rise, the state of the GMX token worsened.

Might the bears make an look for GMX?

In response to Santiment, the tokens MVRV ratio elevated over the previous few weeks. This implied that if a lot of the holders had been to promote their positions, they might find yourself profiting. This may add to the promoting strain on holders and will drive the token’s value down sooner or later.

Together with excessive promoting strain, there was additionally a decline in GMX’s community development, indicating that new addresses had misplaced curiosity within the token.

How a lot are 1,10,100 GMXs price in the present day?

Coupled with that, there was additionally a decline within the velocity of the token. This meant that the frequency with which GMX was being traded had decreased.

Supply: Santiment

Total, although the GMX protocol noticed constructive developments, the token’s indicators recommended a unfavourable outlook for its future.