MYX Surges 17%: One Cautionary Signal for Traders

MYX Finance [MYX] has captured investor attention with a notable 17% price increase amid strong on-chain performance. While the current market activity suggests potential for further gains, traders should remain vigilant due to liquidity clusters indicating possible price fluctuations.

Key Takeaways

Strong On-Chain Performance: MYX Finance is attracting investment due to record-high revenue and fees.
Liquidity Clusters: Price may experience sharp swings due to liquidity levels above and below the current rates.
Recent Gains: MYX’s 17% price climb reflects a growing interest from traders.
Calm Market Conditions: The current market remains steady, indicating potential for more upside as trading activity escalates.

MYX Chart

MYX’s On-Chain Performance Attracts Investors

The impressive performance of MYX Finance has significantly contributed to its appeal among investors. As reported by DeFiLlama, both revenue and fees generated in the current fourth quarter have reached unprecedented levels.

In just the last 24 hours, revenue generated for the treasury, ecosystem funds, and keepers amounted to a remarkable $24,329. Alongside this, trader fees surged to 3.35 times that figure, totaling around $81,651.

MYX Earning Data
Source: DeFiLlama

Such record-breaking figures represent strong activity for a recently launched protocol, which indicates an operational product with active users—a promising sign for investors.

In terms of capital movements, however, the ecosystem has seen minimal activity. The total value locked (TVL) in MYX has only slightly increased, with the recent locking of $150,000 bringing the total TVL to $23.47 million. This suggests that although activity has surged short-term, investors remain cautious about MYX’s long-term outlook.

Derivatives Market Takes Note

Traders in the derivatives market are also capitalizing on MYX as momentum builds. Recent data indicates that the capital circulating in this market has risen to $46.17 million, marking a 23% increase.

Importantly, the Open Interest (OI)-Weighted Funding Rate remains positive. With $10.6 million backing this positive funding rate, most capital is flowing into long positions, underscoring market confidence.

MYX Open Interest Chart
Source: CoinGlass

Historically, positioning against the market during periods of rising prices and significant increases in long positions has tended to produce unfavorable outcomes for traders. Over the last 24 hours, this trend continued, with approximately $123,000 in short positions forcefully closed, which is notably lower compared to the liquidation levels of long positions.

A Warning on the Horizon?

Despite the overall positive market sentiment, there are signals suggesting potential price drop risks. Understanding liquidity clusters, which are regions on charts marked by green and yellow, can help traders interpret these dynamics effectively.

MYX Liquidation Heatmap
Source: CoinGlass

As illustrated in the liquidation heatmap, liquidity clusters exist both above and below the current price. Given that prices are trending upward, the market will likely respond to the clusters positioned above first.

Should these upper liquidity clusters be cleared, prices may then gravitate toward the lower clusters, suggesting a potential sharp decline to those levels. However, these clusters do not guarantee a price drop since prevailing bullish market conditions and MYX’s ongoing popularity could still motivate investors to push prices higher.