Currently positioned as the 54th largest cryptocurrency, Synthetix (SNX) is closely aligned with the overall market trend. In the last 30 days, SNX has a substantial upward trend of 60%, while this year’s performance shows an impressive price increase of more than 108%.
These remarkable achievements indicate that there is opportunity to continue this bullish momentum for the decentralized protocol and its own token.
Significant growth for Synthetix as demand for derivatives in the chain increases
Well-known cryptocurrency analyst and writer Jake Pahor has done just that expressed a very bullish take on SNX, which sees it as the ultimate picks and shovels game in anticipation of the coming bull market.
Pahor highlights Synthetix’s central role as the backbone for derivatives trading in the decentralized finance (DeFi) sector. The protocol has already achieved annualized revenues of $54 million and serves as a platform that enables the creation and trading of synthetic assets such as commodities, stocks and currencies.
While Synthetix may not have user-facing front-ends, it supports popular DeFi applications such as Kwenta, Polynomial, dHedge, and Lyra. As demand for permissionless trading in spot synthetics and on-chain derivatives of traditional assets continues to rise, Synthetix is ready to significant growth in the coming years, Pahor said.
In particular, a key driver of Synthetix’s success lies in the fees generated on each synthetic asset exchange, ranging from 0.1% to 1% (0.3% on average). These fees are targeted at SNX stakers, creating a rewarding incentive structure.
SNX, sUSD and eSNX are the three main tokens used within the Synthetix ecosystem, each serving different purposes in terms of staking, collateral and protocol functionality.
With a circulating supply of 326.5 million SNX tokens and a total supply of 327.2 million, Synthetix boasts a market capitalization of $1.14 billion, putting the company at the forefront of the Synthetic Tokens category. The protocol’s coffers contain a healthy $145.96 million, including stablecoins, BTC/ETH and its token SNX.
SNX Bulls Poised for Breakout Opportunity
Synthetix operates under the governance of four major bodies: Spartan Council, Treasury Council, Ambassador Council, and Grants Council. The decisions and proposals of these councils are subject to the majority vote of SNX stakeholders, ensuring a democratic and community-driven approach to protocol development.
It was founded in 2017 as Havven, a stablecoin protocol, and in 2018 the project was renamed Synthetix, with a focus on trading synthetic assets and derivatives.
According to Pahor’s analysis, with a “strong ecosystem” of projects built on infrastructure and a first-mover advantage, Synthetix has established itself as a market leader in the Synthetics category.
Moreover, the upcoming release of Synthetix V3, including Perps, Base and USDC, is expected to be a important catalyst for the protocol. Furthermore, the protocol’s DEX perps feature aims to compete with centralized exchanges, while Infinex’s front-end promises a user experience similar to traditional CEX trading.
Currently, SNX is trading at $3,455, reflecting a significant uptrend of 4.7% over the past 24 hours. This positive momentum follows a gain of 31% over the past fourteen days.
In the near future, SNX faces a crucial hurdle in surpassing the resistance level at $3.58, which is necessary to retest the recently reached yearly high of $3,810. Since SNX reached this high just a few hours ago, the next target is to cross the $4 mark, a level not seen since August 2022.
On the other hand, if a near-term pullback or correction occurs for SNX, it will be crucial for bullish investors to defend the $3,035 support level. If this level is maintained, a favorable bullish trend could be maintained for the rest of the month.
Featured image from Shutterstock, chart from TradingView.com