Joining Cardano, Dogecoin, and Chainlink, Synthetix Network Token (SNX) has been one of the top-performing cryptocurrencies over the past few months. It is one of the best-performing decentralized finance altcoins by far.
As the chart below indicates, the cryptocurrency is up by more than 250 percent since the start of June. SNX is also up by 50 percent since the start of July.
Santiment noted that its daily active addresses vs. price divergence indicator is printing its “third consecutive bearish signal.” The indicator shows the divergence between price action and SNX’s on-chain activity on the Ethereum blockchain.
The last time this indicator printed three consecutive bearish signals was in “late February, when Synthetix was well on the decline,” according to Santiment.
This historical precedent predicts the popular crypto asset may undergo a bearish reversal in the days and weeks ahead.
A sell-side liquidity crisis could change SNX’s bearish outlook
Despite this on-chain trend, Synthetix could benefit from a number of other trends.
Such a crisis is when there isn’t enough of the crypto to satisfy buying pressure. This will result in a positive feedback loop that pushes prices higher:
“SNX is about to have a sell-side liquidity crisis. I haven’t yet seen a community with holders this strong — no one is selling. Holders already know about the upcoming product roadmap — futures, layer 2 trading, margin — and everyone is expecting CEX listings.”
This was corroborated by another trader, who noted that 94 percent of the supply of SNX on Uniswap, a decentralized platform that allows users to trade cryptocurrency, has been bought up over the past three months.
Boosting the altcoin further, Binance announced support for Synthetix Network Token on Jul. 9. Binance is arguably the altcoin’s first major listing, giving many investors access to SNX for the first time ever.