Plasma [XPL] surges 21% after DeFi tie-ins, but THIS could stall the run!

Key Takeaways

What drove Plasma’s recent rebound?

Integrations with Aave, Ethena, and Pendle boosted the altcoin’s confidence.

What’s next for XPL’s price action?

A close above $0.50 could open a path to $0.80, but weak liquidity may trigger pullbacks.

Plasma [XPL] has caught the attention of many since its launch on 25 September.

In fact, the platform’s native token has been driven by the integration of DeFi protocols like Aave [AAVE], Ethena [ENA], and Pendle [PENDLE] as it supports zero-fee USDT transfers.

After debuting at $1.68, XPL crashed below $0.30. However, it rebounded recently with a 21% daily surge. Total users and deposits hit new highs too, hinting at renewed interest.

Is a bullish reversal in play?

Plasma bottomed at $0.25 after the broader market crash, then consolidated between $0.35 and $0.50. The altcoin, at press time, was trading near the upper limit of that range.

The MACD turned positive, signaling a momentum shift towards buyers. The Trend Strength Index (TSI) hovered near 1.0, reflecting a strong bullish bias. Meanwhile, the Chaikin Money Flow (CMF) at 0.17 confirmed rising capital inflows.

Together, these indicators pointed to a possible breakout above $0.50.

If sustained, XPL could target $0.80 next. A failed breakout, however, risks revisiting the $0.35 support zone.

Source: TradingView

XPL longs remain dominant!

Long positions appeared to be key in this 21% surge. The Long/Short Ratio flipped back above 1, indicating buyer interest in the token in the last 12 hours.

Source: Coinglass

With that in mind, what have been their areas of interest?

The Liquidation Heatmap highlighted dense long clusters below $0.42, while most profit-taking appeared between $0.45 and $0.50. No major liquidation layers formed above $0.50 – A sign that traders had not yet set new targets.

Source: Coinglass

Still, low liquidity above $0.50 could trigger sharp retracements if the momentum stalls.

Not only did buying and technical breakouts contribute to the surge, but on-chain activity also played a significant role.

Users surge as deposits near $1B

The integration of well-established protocols saw users spike on a monthly scale, as well as deposits. Plasma’s Total Deposits reached $929.44 million, nearing the $1 billion milestone.

Both Plasma’s Monthly Active Users and Ecosystem Active Addresses peaked at 2 million and 9.5k, respectively. However, since this week’s drop, the daily and weekly scales have dipped to 78.8k and 751.2k, respectively.

Source: Token Terminal

Sustained growth in users and deposits could keep sentiment strong. However, broader market alignment remains key for XPL to extend its rally towards $0.80 or beyond.