token is at risk of a 21% drop
The dYdX (DYDX/USD) crypto price moved sideways as the developers move close to full decentralization. The token was trading at $2.40, which was slightly above this week’s low of $2.14. It remains about 35% below the highest level this year.
dYdX moves to decentralization
dYdX is a leading cryptocurrency exchange that makes it possible for people to buy and sell digital currencies in a decentralized manner. It offers both generic coins and perpetual futures contracts. According to CoinMarketCap, the total volume in its platform was over $888 million, higher than Uniswap V3’s volume of $832 million.
dYdX’s token has underperformed in the past few months partly because of its tokenomics, which favors insiders. In February, the developers had to postpone its large token unlocks, which would have released millions of tokens.
dYdX’s developers are now working towards fully decentralization in its upcoming V4 upgrade. That upgrade will remove centralized entities that maintain the operations. It will also use a decentralized autonomous organization (DAO) to control most of its operations.
Even after the V4 launch, dYdX employees will still continue contributing to the ecosystem and they will be paid through trading fees and previous funding. According to Bloomberg, the new version of the app will come online in September.
The vision of dYdX V4 was announced in 2022 and will be launched on the Cosmos ecosystem. Cosmos is a leading blockchain that provides interconnected apps. Its SDK solution has been used to build popular blockchains like Thorchain, Band Protocol, and Celer Network.
dYdX crypto price forecast
The 4H chart shows that the dYdX token has been in a tight range in the past few days. It has formed a descending trendline that tested the highest points since February 2 of this year. The token is oscillating at the 25-period and 50-period moving averages. It is also at a key level since it was the lowest level on February 13 and February 21.
Therefore, the token will likely have a bearish breakout as sellers target the key support at $1.88, which is along the ascending trendline that connects the lowest level on March 11 and January 25. This price is ~21% below the current level of $2.33.