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Frax Share Price Prediction 2024: FXS Price Analysis

Last Updated July 3, 2024 2:55 PM
Valdrin Tahiri
Last Updated July 3, 2024 2:55 PM
By Valdrin Tahiri
Verified by Peter Henn

Key Takeaways

  • The Frax Share price has fallen by 68% since the start of 2024.
  • In July, FXS reached the lowest price since 2021.
  • Will FXS resume its downtrend or can it start a bullish reversal instead?

The news that Frax Finance will launch its own Layer 2 Scaling Solution, tentatively called Fraxchain, in February 2024 has generated interest in the Frax Share (FXS) token. This interest has not resulted in a price increase. However, Frax’s holders will be hoping it can spearhead a renaissance in the field. 

Frax did not immediately respond to a request for comment.

But what is Frax Share (FXS)? How does Frax Share work? Let’s take a look at our own FXS price prediction, made on July 3, 2024. We’ll also examine the FXS price history, and we will talk a little about what FXS is and what it does.

Frax Share Price Prediction 

There are two methods used to create our Frax Share price predictions. More specifically predictions are created using fractals (mirroring movements and indicator readings) and the wave count.

The mean of the two predictions gives the average Frax Share price prediction, the more bullish one is used for the maximum price prediction while the more bearish one for the minimum.

It is important to remember that price forecasts, especially for something as potentially volatile as crypto, very often end up being wrong. 

Minimum Frax Share Price Prediction Average Frax Share Price Prediction Maximum Frax Share Price Prediction
2024 $1.25 $1.41 $1.57
2025 $1.60 $2.62 $3.65
2030 $1.10 $1.36 $1.62

Fractal Method

The 3-day RSI for FXS generated bearish divergence in overbought territory for the first time in November 2021 (green). Shortly afterward, the price broke down from a 242-day descending resistance trend line while the RSI fell below 50. This triggered a 90% decline in 156 days followed by a 170% relief rally in 592 days, until the next bearish divergence triggered another drop.

The RSI generated bearish divergence again in November 2023. Shortly afterward, the RSI fell below 50 and the price broke down from a 299-day descending resistance trend line. The trend line was 1.23 times longer than the one in 2022.

So far, FXS has declined by 75% since the divergence. If the decline also has 1.23 times the length of the one in 2022, FXS will culminate with a new all-time low of $1.05 in August 2024.

Frax Share Fractal Price Prediction
FXS/USD 3-Day Chart | Credit: Valdrin Tahiri/TradingView

Then, a similar relief rally would lead to a price of $2.70 in September 2026. Throughout this movement, the wave count method gives Frax Share price predictions of $1.25 and $1.60 for the end of 2024 and 2025, respectively.

Wave Count Method

The wave count method indicates FXS has been correcting inside an A-B-C corrective structure since its all-time high in March 2022. Giving waves A:C a 1:1 ratio will lead to a low of $1.02. If waves A:C have a 1:1 ratio, FXS will reach a low of $1.02. Giving wave C 0.618 times the length of waves A and B predicts this low will be reached in April 2025.

A similar relief rally could then follow that has 0.618 times the duration of the previous downward movement. More precisely, the wave count method gives Frax Share predictions of $1.57 and $3.65 for the end of 2024 and 2025, respectively.

Frax Share Wave Count Price Prediction
FXS/USD Weekly Chart | Credit: Valdrin Tahiri/TradingView

Finally, we use the rate of increase or decrease since launch to make a Frax Share price prediction for the end of 2030. In the 1288 days since its launch, the FXS price has fallen 32%, for a rate of decrease of 0.02% per day.

Projecting this rate of decrease until the end of 2030 leads to a FXS price of $1.36. Adding and removing 20% to this target leads to the minimum and maximum Frax Share price predictions.

Frax Share 2024 Price Prediction

The wave count and fractal methods give very similar Frax Share price predictions for the end of 2024. Both suggest the FXS price will be correcting on its way to its all-time low, providing targets of $1.25 and $1.57, respectively.

Frax Share 2025 Price Prediction

The wave count and fractal methods give different price predictions for the end of 2025. While both imply the FXS price will reach its all-time low in 2025, the magnitude of the recovery will be much bigger in the wave count method. As a result, the wave count prediction gives a target of $3.65 while the fractal one of $1.60

Frax Share 2030 Price Prediction

The Frax Share price prediction for the end of 2030 uses the current rate of decrease. A price between $1.10 and $1.62 is likely if a similar rate of decrease continues for the foreseeable future.

FXS Price Analysis

The weekly time frame FXS price chart is bearish. It shows that FXS broke down from a long-term ascending support trend line that existed for 665 days. After validating it as resistance (red icon) in June, FXS resumed its downward movement toward today’s price low of $2.60.

Frax Share Weekly Price
FXS/USD Weekly Chart | Credit: Valdrin Tahiri/TradingView

The next horizontal support area is at $1.90, which marks the all-time lows and has not been reached since May 2021. With a declining weekly RSI and MACD, the most likely outlook is the continued decrease toward the $1.90 horizontal support level.

Short-Term FXS Price Prediction

The Frax Share price prediction for the next 24 hours is based on the assumption that the downward movement will continue toward the $1.90 horizontal support area. If the decline continues, the FRX price can be trading lower in the next 24 hours, possibly being at $2.40.

Price Decline
FXS/USD Daily Chart | Credit: Valdrin Tahiri/TradingView

Then, the decline will likely end in the lower portion of the $1.90 support area by the end of the month, when FXS can reach lows near $1.80 before bouncing.

FXS Fear & Greed Index

The Fear & Greed Index measures Bitcoin’s market sentiment on a scale from 0 (Extreme Fear) to 100 (Extreme Greed). It aggregates factors such as volatility, market momentum/volume, social media activity, dominance, and trends to provide a sentiment overview.

Extreme fear can suggest investors are overly worried, potentially presenting a buying opportunity, whereas extreme greed indicates excessive bullishness, often signaling an imminent market correction. On July 3, 2024, the Fear & Greed Index Measured 51, reflecting a neutral view.

Fear And Greed Index
Fear And Greed Index | Credit: Alternative.me

Last week the indicator showed fear at 46 while it showed greed at 73 last month.

Frax Share Average True Range (ATR)

The Average True Range (ATR) measures market volatility by averaging the largest of three values: the current high minus the current low, the absolute value of the current high minus the previous close, and the absolute value of the current low minus the previous close over a period, typically 14 days. A rising ATR indicates increasing volatility, while a falling ATR indicates decreasing volatility.

Frax Share Average True Range
Average True Range for FXS | Credit: Valdrin Tahiri/TradingView

Since ATR values can be higher for higher-priced assets, normalize ATR by dividing it by the asset price to compare volatility across different price levels. On July 2 2024, Frax Share’s ATR was 0.23, implying low volatility. The ATR has been declining since March, when it was at 0.92. Dived by the $2.62 FXS price, the ATR is 0.087.

Frax Share Market Cap to TVL Ratio

The Total Value Locked (TVL) to market cap ratio (TVL ratio) measures the valuation of a decentralized finance (DeFi) project by comparing its market capitalization to the total value of assets locked in its smart contracts. This ratio shows the project’s utilization and links the platform’s health to the value of locked assets.

Frax Share Market Cap/TVL
Frax Share Market Cap/TVL | Credit: DeFiLlama

A ratio above 1.0 indicates overvaluation because the market cap exceeds the value of assets used in the platform. A ratio below 1.0 indicates undervaluation because the market cap is lower than the value of locked assets. On July 2 2024, the Frax Share TVL ratio was 0.26, indicating significant undervaluation. It is worth mentioning that Frax Share’s market cap has never been higher than its TVL. 

Frax Share Relative Strength Index (RSI)

The Relative Strength Index (RSI) is a momentum indicator traders use to determine whether an asset is overbought or oversold. Movements above and below the 50 line also indicate if the trend is bullish or bearish. On July 3, 2024, the Frax Share weekly RSI was at an all-time low of 24, indicating oversold conditions.

Frax Share Weekly RSI
FXS/USDT Weekly Chart | Credit: Valdrin Tahiri/TradingView

Frax Share Price Performance Comparisons

FXS is a liquid staking governance token on Ethereum. So, let’s compare it with other similar tokens.

Current Price One Year Ago Price Change
FXS $2.60 $6.34 -59%
RPL $18.03 $38.60 -54%
LDO $1.73 $2.16 -20%
JTO $2.27 $3.59 (One Month Ago) -36%

FXS Price History

Let’s take a closer look at Frax Share’s price history . While past performance isn’t necessarily indicative of future results, understanding what Frax Share has done can help us contextualize future predictions.

2020-2021: Frax Share (FXS) entered the open market in late December 2020 at around $3.90. The token saw significant growth during the early 2021 crypto boom, peaking above $25 in January. Despite a subsequent decline, FXS made a strong recovery, closing the year at $39.04.

2022: The launch of a crypto pool featuring the Frax stablecoin by Terra propelled FXS to new heights, reaching an all-time high of $42.67 on April 3. However, the collapse of Terra in May caused FXS to plummet below $10. The rest of the year was largely unimpressive, with FXS closing 2022 at $4.14, marking an annual loss of nearly 90%.

2023: FXS started the year with a brief surge, exceeding $10 in January and peaking at $14.09 on February 9. The token then declined, hitting $4.61 on June 15 following the SEC’s lawsuits against Binance and Coinbase. Although it recovered to $7 on August 15, the market downturn after Elon Musk’s SpaceX sold millions of dollars worth of Bitcoin (BTC) led to further declines. FXS closed the year at around $9.50.

2024: The new year began with a downward trend, with FXS decreasing to $7.30. The decline continued, reaching a low of $2.60 in July, the lowest price since 2021.

Price History
Frax Share Price History | Credit: CoinGecko
Period Price
Today (July 3, 2024) $2.63
Last Week (June 26, 2024) $3.35
Last Month (June 3, 2024) $4.60
Three Months Ago (April 3, 2024) $6.98
Last Year (July 3, 2023) $6.48
Launch Price (December 21, 2020) $6.91
All-Time High (January 12, 2022) $42.80
All-Time Low (June 25, 2021) $1.50

 

Who Owns the Most Frax Share (FXS)?

As of July 3, 2024, the five wallets with the most Frax Share  were

  • 0xc8418af6358ffdda74e09ca9cc3fe03ca6adc5b0. This wallet held 44,542,472 FXS, or 44.54% of the supply.
  • 0x63278bF9AcdFC9fA65CFa2940b89A34ADfbCb4A1. This wallet held 15,643,502 FXS, or 15.64% of the supply.
  • 0xf977814e90da44bfa03b6295a0616a897441acec. This wallet held 5,859,681 FXS, or 5.86% of the supply.
  • 0x03b59bd1c8b9f6c265ba0c3421923b93f15036fa. This wallet held 2,785,238 FXS, or 2.79% of the supply.
  • 0x34c0bd5877a5ee7099d0f5688d65f4bb9158bde2. This wallet held 2,688,265 FXS, or 2.69% of the supply.

Frax Share Supply and Distribution

Supply and Distribution Figures
Maximum Supply 100,000,000
Circulating Supply as of July 3, 2024 80,269,752 (80.2% of total supply)
Holder Distribution as of July 3, 2024 Top 10 holders own 78.5% of supply

From the Whitepaper

In its technical documentation, or whitepaper , Frax Finance says FXS is designed to link the various parts of the protocol together. 

It says: “It is meant to be volatile and hold rights to governance and all utility of the system. It is important to note that we take a highly governance-minimized approach to designing trustless money in the same ethos as Bitcoin. We eschew DAO-like active management such as MakerDAO. The less [sic] parameters for a community to be able to actively manage, the less there is to disagree on.

Frax Share (FXS) Explained

Frax Finance  supports the Frax stablecoin. Because Frax aims to stand at $1 all the time, it needs some help in doing so. 

The Frax Share crypto, also known by its ticker handle FXS, is minted if Frax moves above the dollar. Likewise, it is burned, or destroyed, when Frax falls below $1.

Frax Finance was launched in 2020 by computer programmer Sam Kazemian and former Donald Trump adviser Stephen Moore. 

How Frax Share Works

As we have already said, Frax Share helps the Frax stablecoin maintain parity with the dollar. Unlike many other stablecoins, it does not necessarily need to be worth exactly $1 for it to be exchanged for a dollar. This means that, at least in theory, people can gain arbitrage opportunities from trading Frax.

If the way in which Frax works seems familiar, it is because it is an algorithmic stablecoin, with Frax Share serving as its collateral token. This means it operates in a similar way to the ill-fated USD stablecoin and the doomed Terra coin. 

FXS also gives its holders the right to vote on changes to the network. People can buy, sell, and trade it on exchanges. 

Is Frax Share a Good Investment?

It is hard to tell. While the news that it is to create its own Layer 2 Scaling Solution – not to be confused with an actual blockchain – means the people behind Frax Share are in the business of trying to grow their network, there are still concerns.

While most on-chain metrics show undervaluation, the technical outlook still remains bearish.

As ever with crypto, you will need to make sure you do your own research before deciding whether or not to invest in FXS.

Will Frax Share go up or down?

Our Frax Share price predictions in multiple time frames are bearish. However, price predictions have a well-earned reputation for being wrong. Keep in mind, too, that prices can, and do, go down as well as up. 

Should I invest in Frax Share?

Before you decide whether or not to invest in Frax Share, you will have to do your own research, not only on FXS, but on other, related, coins and tokens. Either way, you will also need to make sure that you never invest more money than you can afford to lose.

FAQs 

How many Frax Share are there?

On July 3, 2024, there were about 80.2 million FXS in circulation out of a maximum supply of 100 million.

Will Frax Share reach $100?

Our price predictions suggest that FXS is mired in a downtrend and will not reach $100 in the near future.

What is Frax Share used for?

The Frax Share (FXS) token supports the Frax stablecoin. Holders can vote on changes to the Frax Finance platform. People can buy, sell and trade it on exchanges.

 

Disclaimer
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
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