Though GMX’s market dominance declines, what’s behind its price pump

• GMX’s fees and revenue declined sharply, but price action remained bullish.
• Active users also went down, and on-chain performance was concerning. 

The latest data from Dune revealed that since 10 November, GMX’s volume plummeted from a 90% market dominance to 40%. 

1/2 Is the perp market zero sum?♻️

Since Nov 10th, GMX volume has gone from 90% market dominance to 40%📉

But despite new protocols emerging, GMX does roughly the same if not more in daily volume today. pic.twitter.com/Hv6h5Ai9o7

— Thor⚡️Hartvigsen (@ThorHartvigsen) April 9, 2023

Read GMX’s Price Prediction 2023-24

A decline similar to GMX’s market dominance was also noted in terms of revenue and fees. As per Token Terminal, GMX’s fees and revenue gained downward momentum over the last 30 days. This looked concerning as it indicated less usage of GMX.

Source: Token Terminal

Network value remains stable 

It was interesting to note that despite the drop in revenue, the GMX network’s value remained consistent. DeFiLlama’s chart pointed out that GMX’s TVL has remained dormant for quite some time, but the good thing is that it did not plummet.

But will stable TVL be enough for the network to lure more users onto the network, increasing its revenue?

Source: DeFiLlama

GMX to play its part

It seemed that the token’s price could play a role in attracting new users, as it has been bullish. As per CoinMarketCap, the token’s price has increased by more than 5% in the last seven days. At the time of writing, the token was trading at $77.71 with a market capitalization of over $669 million.

This growth happened at a time when investor interest in DEX tokens was at an all-time low. 

investor interest to trade DEX coins at ATL pic.twitter.com/HZgREZI7x7

— Token Terminal (@tokenterminal) April 9, 2023

Will the token continue to pump? 

A look at the token’s daily chart revealed a few market indicators that supported the possibility of a continued surge. For instance, the Exponential Moving Average (EMA) Ribbon pointed out a bullish advantage in the market as the 20-day EMA was resting above the 55-day EMA.

After declining, GMX’s Relative Strength Index (RSI) registered a minute uptick and was still above the neutral mark, which looked optimistic. However, the rest of the indicators suggested otherwise. The token’s Money Flow Index (MFI) and Chaikin Money Flow (CMF) both declined, which could result in an end to the crypto’s gains in the near term. 

Source: TradingView

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Users decline

Even if GMX’s price continues to rise, concerns are far from over. Token Terminal’s data revealed that the daily active users on GMX declined sharply over the last month. The decline might have caused the network’s revenue to plummet as well. 

Source: Token Terminal

Sentiments on the token also remained pretty negative for the majority of the time last month, as evident from its weighted sentiments. The token’s volume declined, suggesting less interest from investors in trading the token. Additionally, GMX’s network growth plummeted, which too spelled trouble.

Source: Santiment