dYdX price eyes 10% losses amid exit liquidity after 6.52 million DYDX token unlocks

• dYdX ecosystem will add 6.52 million tokens worth $13.95 million to its circulating supply in under 24 hours from now.
• Like the previous cliff unlocks event, DYDX could fall 10% to $1.882 as traders avoid being caught in exit liquidity.
• Invalidation of the bearish outlook will occur if the altcoin records a decisive daily candlestick close above $2.347.

dYdX price shows signs of an impending downtrend, and for good reason, considering the network will unleash millions of DYDX tokens to the markets in cliff unlocks. While part of the tokens will go to the community treasury, a huge chunk will go toward liquidity provider and trading rewards.

The possibility of investors offloading the reward allocations for immediate selling sets dYdX price up for imminent selling pressure.

Also Read: Optimism, Sui, Hedera prices brace for over $138 million worth in token unlocks

dYdX price readies for a 10% downswing

dYdX price could fall 10% after the network pours an additional 6.52 million DYDX tokens worth approximately $13.95 million into its circulating supply. In the previous unlocks on August 1, the network unlocked the same amount of tokens, which sent the price down the same gap to find support at $1.882.

DYDX token unlocks

With history repeating, bolstered by bearish fundamentals, dYdX price eyes the same fate that could trap traders among exit liquidity.

Increased seller momentum could send dYdX price below the immediate support level at $2.005 to potentially dip into the demand zone (blue) around the psychological $2.000. Strong buyer momentum often defines demand zones, meaning DYDX could bounce from this zone.

However, if selling momentum from bears outweighs aggressive buying from bulls in the blue order block, dYdX price could slip through to tag the August 1 lows at around $1.882. Such a move would constitute a 10% downswing.

In the dire case, dYdX price could extend a leg south to find support at around $1.779, levels last seen around July 10.

Already, momentum indicators suggest an impending slump, with the Relative Strength Index (RSI) headed south and the Awesome Oscillator showing histogram bars turning red, indicative of falling momentum.

DYDX/USDT 1/day chart

On the opposite side, invalidation of the bearish outlook would occur if dYdX price extends north, breaking past the supply zone (red order block) and making it a bullish breaker by decisively closing above it. A daily candlestick close above $2.347 would be ideal, constituting a 10% ascent from current levels. 

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