Here’s Why It Might Fall to $65
Today, August 20, the price of OKB witnessed an impressive rise of 15%, maintaining the upward trend that started last week after OKX announced a significant token burn.
Summary
- OKB’s price has resumed its upward momentum, nearing its monthly high.
- However, it faces potential risks of declining as the funding rate shifts negative.
- According to Wyckoff analysis, it may enter the distribution phase.
OKB (OKB) reached a high of $140, representing a 220% increase from its lowest point this year, which raised its market capitalization to $2.9 billion. The trading volume for the day soared to $330 million. Still, this rally may be approaching its conclusion as the funding rate has turned negative.
OKB Price Faces Risks Due to Negative Funding Rate
Last week, OKB, the main token of OKX, a leading cryptocurrency exchange, saw a surge after developers announced substantial changes to its tokenomics and technological framework.
OKX has moved to Polygon’s X Layer, improving transaction speed to 5,000 TPS, lowering gas costs, and enhancing security and compatibility. Reports suggest that more than 90% of OKX tokens have been successfully migrated to the X Layer.
The developers have also discontinued OKTChain due to its overlap with X Layer. Importantly, they have reduced the circulating supply of OKB tokens to 21 million through a one-time burn of 65.2 million repurchased tokens.
The upcoming potential catalyst for OKB’s price could be the anticipated OKX IPO in the United States, expected this year following the successful IPOs of Circle and Bullish.
Nevertheless, in the short term, the OKB token may encounter a reversal due to the declining funding rate. According to CoinGlass data, the eight-hour funding rate has fallen to -0.011%, its lowest since August 17. A decreasing funding rate usually indicates that investors foresee lower future prices.
Technical Analysis of OKB Token
The daily chart shows that the OKB price surged last week following the token burn announcement. Prior to this, it had been consolidating for an extended period, correlating with the accumulation phase of Wyckoff theory.
This surge was part of a markup phase characterized by increased demand and fear of missing out. Therefore, there is a chance it might soon transition into the distribution phase and experience a downturn.
Other indicators, such as the Relative Strength Index and the Stochastic Oscillator, suggest that it is currently overbought. Moreover, it has climbed significantly above both the 50-day and 100-day moving averages, indicating the potential for a mean reversion.
If a decline occurs, the OKB price could drop to the support level of $64, which reflects the swing high from November of last year.