NOIDA (CoinChapter.com) — Dymension (DYM) price enjoyed an impressive bull run recently following the launch of its Mainnet. The project’s recent airdrop announcement attracted buyers to the market and helped push DYM’s price to a new ATH near $8.2 on Feb. 9, but bearish risks remain.
Bullish cues like mainnet launch, investor interest and hype, limited supply dynamics, and speculations helped propel the token. However, the Dymension token price is at the risk of dropping more than 50% from its current price levels.
Technical Patterns Highlights DYM Price Risks
DYM prices are moving inside a ‘technically‘ bullish formation called the ‘ascending parallel channel,’ better visible on the hourly timeframe.
A series of progressive higher highs and higher lows form the pattern, suggesting bullish sentiment. Yet, the pattern carries inherent risks. A break below the channel’s support might catalyze a trend reversal and substantial price drop.
Dymension price is currently flirting with the lower boundary of the channel pattern. A confirmed breach here, especially with a corresponding increase in trade volume, would likely initiate a bearish phase.
The descent would likely drop to the support at the 23.6% Fib retracement level near $3.2, a drop of over 54% from current price levels. Furthermore, there is a bearish divergence between DYM price and its RSI.
Effective risk management remains a cornerstone for traders. Setting stop losses below the channel’s support can curb losses if the price breaks downward.
The Relative Strength Index (RSI) hovers around the neutral 50 mark, hinting at possible momentum loss and a potential pivot in price direction.
Despite Dymension’s recent market performance, the technical outlook advises caution. Traders should monitor confirmed breakouts or breakdowns and remain ready to adjust their strategies.
What Is The Dymension Project
Dymension is a blockchain network that aims to enhance user experience through its modular blockchains called RollApps. The RollApps help develop app-specific chains, facilitating various applications from gaming to decentralized finance (DeFi) and NFTs.
The project leverages the Cosmos SDK and Celestia DA for its infrastructure, scalability, interoperability, and efficient data management.
Central to Dymension’s architecture is the Dymension Hub, which acts as the ecosystem’s backbone, orchestrating network activities and managing interactions among RollApps.
The setup allows for rapid transaction processing and creates a collaborative ecosystem within Cosmos through the Inter-Blockchain Communication (IBC) protocol. The project’s native token, DYM, has a total supply of 1 billion tokens, of which 146 million DYM tokens are in circulation.
