Synthetix price shows continued strength as SNX supply on exchanges drops
|- Synthetix supply on exchanges declined to 2.59% on Monday, likely reducing selling pressure on SNX.
- SNX price rallied nearly 12% in the past week.
- The Synthetix ecosystem has updates lined up for the entire stack of the protocol.
Synthetix, a decentralized asset issuance protocol, is used for staking rewards and community voting. The token yielded nearly 17% weekly gains for holders, and on-chain metrics point to a continued bullish outlook for SNX.
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Retail traders buy SNX, whales sell it
Based on data from on-chain intelligence tracker Santiment, retail investors are buying SNX tokens when the token’s supply on exchanges has declined and remains at low levels. The combination of these two factors is generally bullish for the asset’s price as it implies reduced selling pressure across crypto exchange platforms.
Investors who hold between 100 and 1,000 SNX tokens, and between 1,000 and 10,000 SNX tokens, have consistently added to their portfolios since November 20. In the same timeframe, large wallet holders (with 10,000 to 100,000 SNX, and with 100,000 to 1 million SNX) have sold their holdings, reducing their exposure to the asset.
The accumulation by the smaller retail cohort supports the theory of consistent SNX price gains. In a retail driven rally, typically, gains are likely sustainable.
SNX holdings of different cohorts. Source: Santiment
Synthetix’s supply on exhanges has remained at low levels for the last four months. However, it has declined from 2.92% on November 20 to 2.59% on Monday. SNX price rallied alongside dwindling exchange supply.
SNX Supply on exchanges (as % of total supply) and price. Source: Santiment
Updates lined up in SNX ecosystem
There are several upgrades lined up for the entire stack of Synthetix protocol. Synthetix V3 is launching on Coinbase’s Layer 2 chain in an attempt to expand the chain. The Synthetix team is working on a new frontend for launching on Base, with the objective to compete with the trading experience for users on centralized exchanges.
Half of the revenue generated on Synthetix after its rollout on the Base chain will be distributed to SNX holders through a buy-and-burn mechanism. In the past 90 days, the protocol has collected $8.2 million in fees.
At the time of writing, SNX price is $4.537, up nearly 4% on the day.
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