Can Aster’s buyback plan restore market trust after a 57% correction?

Key Takeaways

Can ASTER reverse its October losses? 

Bulls attempted to mark a bottom at $1, so a recovery could be likely if broader market sentiment improves. 

Can the buyback become a recovery catalyst? 

The spot market was flat and was yet to pick up momentum to confirm the update as a catalyst. 

Aster [ASTER] announced another round of token buybacks, but bulls remained unimpressed.

On the 29th of October, the YZi Labs-backed perpetual DEX said that it would use up to 80% of the trading fees to drive the latest buyback program.

Source: X

The first “deflation” drive happened about two weeks ago. It scooped 100,000,000 ASTER tokens on October 10th. 

But this was the same day the market experienced the flash crash that liquidated over $19B. So, using past drive to gauge ASTER’s past price reaction would be futile.

What’s next for ASTER price?

Nonetheless, there was less excitement after the latest update. 

In fact, one critic retorted, 

“Maybe they write wrong, This is sellback, not a buyback.” 

The user wished the tokens could be burned instead of keeping them in a buyback address for a future sell-off. 

Meanwhile, ASTER slipped about 2.5%, which was likely accelerated by the FOMC meeting risk-off. Even so, the altcoin had dropped nearly 60% from its record high of $2.4 to around $0.90. 

Source: ASTER/USDT, TradingView

While there was an attempt to mark the $1 area as the bottom, technical chart indicators were still screaming bearish.

The On Balance Volume (OBV), for example, had dropped and remained flat with no meaningful recovery to signal a potential price rebound. 

Similarly, the RSI (Relative Strength Index) on the 12-hour chart has struggled below the average level since October 10th. To put it differently, short-sellers still had the market edge, at least as of writing. 

A calm before a storm?

On the supply and demand side, Arkham data showed that the market was neutral with no selling and no buying demand.

Unlike the spike in flows into on-chain exchanges in late August and early October, the activity collapsed and stagnated in the past few days. 

This meant more tokens moved into on-chain exchanges (selling pressure) but tapered off and went sideways. In other words, the spot market was neutral to bullish, per the On-Chain Exchange Flows. 

Source: Arkham

On the derivatives side, the leveraged traders were surprisingly bullish. In the past 24 hours, they only trimmed long positions by about 1%, perhaps to derisk against the FOMC meeting.

But overall, the long positions commanded a whopping 77%, a strong addition in the past five days. Taken together, leveraged players were bullish, but the spot market was yet to flip positive to drive a sustainable recovery. 

Source: Coinglass