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GMX Price Climbs Above $31 Resistance – $6 Million Arbitrum DAO Grant Could Accelerate Growth

Published May 30, 2024 2:30 PM
Valdrin Tahiri
Published May 30, 2024 2:30 PM

Key Takeaways

  • GMX has received a grant worth over $6 million by the Arbitrum DAO
  • The GMX price has increased since April 13, breaking out above $31.
  • Despite the breakout, GMX has traded in a short-term corrective pattern.

The GMX price has not performed well in 2024. In fact, it has corrected for almost the entire year, falling by nearly 40% in the process. The decrease culminated with a low of $22.15 on April 13.

Despite its underperformance, the GMX price has started an upward movement, possibly spurred by a grant from the Arbitrum DAO. Reclaiming the $31 area is the first step in creating a bullish structure and the first higher low in 2024.

GMX Receives Grant

On April 29, GMX submitted a new proposal  under the Arbitrum STIP Bridge program, requesting a grant of 5.4 million ARB to enhance liquidity, trading, and grant incentives. This follows the success of the initial STIP program, where GMX saw substantial increases in V2 liquidity, Open Interest, and trading volumes.

The new grant aims to further strengthen GMX’s role in the Arbitrum ecosystem, optimizing incentive distribution and ensuring sustainable growth. With this funding, GMX intends to attract more users and developers, enhancing the overall DeFi landscape on Arbitrum.

On May 29, the Arbitrum DAO announced that it has accepted the proposal. In turn, it will distribute 5.4 million ARB tokens as incentives, which at the current market price are worth slightly over $6 million.

GMX currently has a Total Value Locked (TVL) of $740 million , 40% below the all-time high of $1.3 billion. In the Arbitrum ecosystem, it trails only Aave and Pendle. The price has increased since April and recently moved above an important resistance area.

GMX Price Reclaims Resistance

The daily time frame price chart shows that GMX has increased since April 13. It created a higher low on May 1 and accelerated its rate of increase afterward. On May 20, the price broke out from the $31 resistance area, validating it as support on May 28.

The daily RSI and MACD support this breakout. They have increased alongside the price, and recently moved above into bullish territory above 50 and 0, respectively.  The next resistances are at $44, a horizontal resistance area and $50, a descending resistance trend line.

GMX Price Increase
GMX/USDT Daily Chart | Credit: TradingView

Unlike the daily time frame, the six-hour chart gives mixed readings. Since the bounce started, the GMX price has traded inside an ascending parallel channel, which is considered a bearish pattern. Despite three attempts at breaking out (red icons), GMX was rejected each time.

On top of this, the wave count shows a potential A-B-C structure (white), where wave C developed into an ending diagonal (black). This is in line with the channel and supports a breakdown.

GMX Wave Count
GMX/USDT Six-Hour Chart | Credit: TradingView

As a result, the readings from the daily and six-hour time frames do not align, failing to give a clear direction for the future trend.

Mixed GMX Outlook

While the GMX news is positive, there are mixed readings from the price action in different time frames. While the daily chart shows a breakout, the shorter-term six-hour one suggests the price is in a corrective pattern instead. This is supported by the wave count.

So, on one hand, if the price breaks down from the corrective pattern and loses the $31 support area will mean the trend if bearish. On the other hand, a breakout from the channel can trigger an increase to $44 and possibly $50.

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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