Key Takeaways:
- WAVES prices jumped nearly 140% since May 30, leading the crypto market resurgence.
- The Waves DeFi revival plan might be the reason behind the price jump.
NEW DELHI (CoinChapter.com) — Blockchain platform Waves’ namesake native token, WAVES, topped the crypto recovery this week as it jumped nearly 140% between May 30’s low ($4.35) and Tuesday’s May 31’s high ($10.3).
The uptrend helped the altcoin’s prices move above their 20-day moving average (red, 20-day M.A.). However, the long upper wick on Tuesday’s candle indicates short-term traders are selling on the relief rally.
On the other hand, the WAVES token’s relative strength index is currently neutral, with 49.85 on the daily charts. The rising RSI trendline might suggest a weakening selling pressure for the altcoin’s prices.
If Waves prices continue to rise, the token would likely challenge resistance near $10. A move above immediate resistance would provide the token the momentum needed to challenge resistance near its 50-day M.A. (blue) at $13.
A sustained uptrend might see the altcoin prices reach $17, near the token’s 200-day M.A. (green) before corrections pare prices.
Also Read: Twitterati attacks Ethereum, “depressed” co-founder Vitalik Buterin – here’s why.
Conversely, if bears continue to sell, the WAVES token might fall to support from its 20-day M.A. (red) at $6.1. If the token breached below immediate support, the altcoin would likely fall to $4.2, which arrested Waves prices’ downtrend.
Finally, a marketwide sell-off could pull down the token’s prices near $3, which previously acted as resistance for the token between Sept 3, 2020, and Oct 16, 2020.
Waves DeFi Revival Plan Behind Price Jump?
Waves Tech, the team behind Waves blockchain, announced a revival plan on May 27 after a massive sell-off of USDN, the protocol’s native algorithmic stablecoin, led to the de-pegging of the stablecoin from the U.S. dollar.
The USDN is Curve Finance liquidity pool’s native stablecoin. Additionally, a lending protocol on the blockchain, Vires Finance, suffered a liquidity crisis that led to a sell-off in WAVES. The LUNA/UST crash further worsened the situation and led to a second de-pegging of USDN.
The proposed DeFi revival plan aims to restore the dollar peg of USDN. The plan outlines four major steps, including liquidating whales’ accounts and restoring liquidity to Vires. The second step would be to return liquidity to the USDN pool using Curve and CRV tokens.
Also Read: WAVES risks further price crash as ‘Ponzi’ accusations grow.
The protocol also plans to slowly sell USDN collateral over two months, followed by issuing a new token to recapitalize the Neutrino Protocol. It seems the step requiring liquidation of whale accounts might have caused WAVES prices to explode vertically.
Meanwhile, data from TVL aggregator DeFILlama shows that the total value locked (TVL) in the Waves ecosystem rose by 18.66% in the past 24 hours.
At the time of writing, WAVES was trading at $8.22, up 8.5% on the day.
