Serum (SRM) shoots to $0.14 after massive spike: Here's why?

Serum (SRM) shoots to $0.14 after massive spike: Here’s why?

23 June 2023

in Solano

Reading Time: 2 mins read

2023-06-23 08:33:35 ET

Serum

price went vertical today, exploding from below $0.56 to hit $0.14 on Friday morning. Could be exit liquidity loading, but what’s clear is that the price of this Solana ecosystem token gained more than 120% before buying momentum showed to be slowing as of the time of writing.

What’s behind the SRM price rally today?

Serum is a decentralized exchange (DEX) created by a consortium that included the failed crypto exchange FTX, Alameda and the Solana Foundation. As a DEX platform, one of Serum’s key features is its high speed and low costs and that made it one of key ecosystems in the decentralized finance (DeFi) space before the FTX implosion in 2022 pushed the value of its native SRM token to near zero.

SRM holders have governance rights and earn from staking rewards and trading fee discounts. It’s likely demand for the token as the DeFi ecosystem tokens gain is behind the SRM price rally.

Solana

tokens such as Raydium (RAY) and Bonfida (FIDA) are also up.

Also catalysing this is the latest news around the restarting of FTX, the so-called FTX 2.0, with

bids

for the platform set to continue for the next month. Venture firm Tribe Capital’s bid excited the community when it recently stated it plans for the exchange.

SRM price outlook

Serum price exploded higher after what seemed like eternal consolidation between $0.05 and $0.06. The breakout has the price at levels last seen in April and likely to bring the $0.25 zone into view. Further gains could see SRM/USD target year-to-date highs near $0.50 and the psychological $1.

Serum 4-hour price chart showing SRM/USDT on KuCoin. Source:

TradingView

What next for Serum price?

As the 4-hour chart shows, the relative strength index (RSI) is above 90 to suggest overbought conditions. The moving average convergence divergence (MACD) gives a bullish outlook and the 24-hour volume shows massive network activity. Bulls could go higher, especially with the altcoin market likely to rip if sentiment fuelled by the sentiment around impending institutional inflows continues to drive Bitcoin higher.

However, SRM holders might want to note the potential of sell-off pressure in the short term around regulatory headwinds. Profit booking deals and whales repositioning are also key factors to consider.