DYDX price rally likely as community unanimously supports migration to dYdX chain

DYDX price resisted selling pressure despite Tuesday's token unlock in light of the migration to dYdX chain and the adoption of version 4 of the project. The proposal, shared by crypto market maker Wintermute, is likely to be approved as it has received 100% support from community members on a vote that is still under way.

Adding to the success of the vote, DYDX's relative strength could also be attributed to increasing activity from Whales. On-chain data showes that large wallet addresses, or those holding between 10,000 and 10 million DYDX tokens, appear to be accumulating the DEX platform’s token.

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dYdX to migrate to version 4 after community approval 

Typically, token unlocks tend to push prices down as they increase the circulating supply and thus the selling pressure on the asset. In this case, around $13.95 million worth of DYDX tokens were released. Despite the unlock, the supply on exchanges remained nearly the same as the community seems to be supporting the migration to the dYdX chain.

Crypto market maker Wintermute pitched the adoption of open-source software version 4 for the DEX. The proposal was put to vote on Tuesday, and community members can vote until Saturday. So far, based on the snapshot below, 100% of the community members who cast a vote, representing 21 million dYdX tokens, have voted in favor.

The unanimous approval could be acting as a bullish catalyst for the token. 

V4 adoption and migration to dYdX chain

While dYdX price resisted the post-unlock sell-off, it is uncertain if the current strength will continue. DYDX price posted nearly 10% gains over the past week. In this context, short-term holders could be tempted to capitalize on the gain, although there is no sign of such behavior among dYdX holders yet. 

On-chain metrics that support DYDX price gains

Based on data from crypto intelligence tracker Santiment, there is no significant gain recorded in the token’s supply on crypto exchanges despite the recent unlock event. This metric – which helps tracking the selling pressure on the asset – has declined recently, supporting a bullish thesis for DYDX price. 

DYDX supply on exchanges vs price 

Moreover, big wallet addresses – those holding between 10,000 and 100,000 tokens and between 1,000,000 to 10,000,000 tokens – are consistently accumulating dYdX since mid-June 2023. The accumulation trend is also bullish sign for the asset. 

DYDX accumulation by large wallet investors vs price

These on-chain metrics support DYDX price gains, making a sell-off more unlikely in the short-term. DYDX trades at $2.14 at the time of writing, a 9.51% gain over the past week.