The GMX token, $GMX, is being used as a case study for educational purposes showcased by DexGuru.
The last few months have been a difficult time to be a crypto trader, whether you've been placing orders on centralized exchanges or navigating the world of DeFi. With the global crypto market cap sitting at 890B USD (at the time of writing), down from the highs of 2.9T USD, much wealth has been wiped away. Making sound investment decisions in a bear market can be extremely difficult with prices falling and volume withering away. ￼One investment trending in the DexGuru terminal with a price increase over the last month is the $GMX token.
GMX is a decentralized perpetual exchange on Arbitrum and Avalanche. With GMX, traders can trade BTC, ETH and AVAX on up to 30x leverage while remaining on-chain. They've recently hit 70k users and a lifetime trading volume of 48B USD.
Let's dive into the technicals.
Since the start of 2022, most tokens and crypto assets have seen price movement in one direction, downwards. As we can see here, $GMX had been trading similarly, with a high in January 2022 of $69 per token and then a gradual fall to $10 in June. The story does not end there, with $GMX rocketing to $29.74 (at the time of writing) in late July. Despite a current increase in token price, more analysis will give us insight into $GMX movements for the coming months.
Any market's liquidity is critical for determining any slippage in your trades. Looking into the liquidity for $GMX, we can see substantial liquidity for trades of many sizes at over $8.5M TVL. Most of this liquidity is in Uniswap V3, which is helpful for a trader wondering where to execute swaps. A healthy market has liquidity growth alongside price increases. Using DexGuru to analyze the liquidity, we see that liquidity has increased by 65% in the last month alongside a 100% price increase￼￼ - showing all the signs of a healthy market and not a quick pump lacking liquidity.
Trade volume showcases the attention a specific asset receives in the market. Volume can be positive or negative depending on the nature of the swaps, but first, let's see what kind of volume $GMX is doing. Over the last week, the GMX token has had an average daily volume of 1.94M USD, signifying many tokens are changing hands daily. With a further dive using the DexGuru terminal, we can see that whales account for a large portion of the volume (a whale is defined as a wallet with 500k+ volume in the last 30 days). It seems like an exciting time to go whale watching!
Using the DexGuru token profile for $GMX, we can gather valuable data on the asset's current holders. With 5700 total holders, approximately 57% of them are currently in profit, even with all-time highs being at $69; this shows that most holders either have diamond hands or have entered into the investment recently. Interestingly, most of the largest holders are in a similar scenario, with their average acquisition cost between $20-$40. While sitting at $30 right now, it seems like regular holders and whales alike are curiously waiting for the next move up or down to dictate the profitability of their investments.
DexGuru is a trading terminal made for traders in the DeFi era, leveraging on-chain analytics combined with token swap execution capabilities. This analysis was done solely with the tools available in the DexGuru trading terminal. With a recently launched DAO in the bootstrap phase, they are decentralizing data and the project itself.
This post is commissioned by DexGuru and does not serve as a testimonial or endorsement by The Block. This post is for informational purposes only and should not be relied upon as a basis for investment, tax, legal or other advice. You should conduct your own research and consult independent counsel and advisors on the matters discussed within this post. Past performance of any asset is not indicative of future results.
© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.