After PYTH’s 14% surge off record low, can it now clear THIS wall of sellers?

Pyth Network [$PYTH] has joined the growing list of cryptocurrencies battered by heavy capital outflows sweeping the market. In fact, more than $584 billion in value have drained away over the past month, with the same weighing down on some assets harder than others.

$PYTH, for its part, carved out a fresh all-time low and slid to roughly $0.04 on 6 June, before staging a 14% rebound. This suggested that investors may be rotating capital back into the asset.

Now, the move may look bullish on the surface, but one question lingers – Is this a sustainable recovery, or a temporary rally set to trap buyers at the top?

A supply zone threatens to cap $PYTH’s rally

A clear hurdle now sits in $PYTH’s path as the latest leg of its recovery pushed the price directly into a major supply order block.

Supply blocks mark the zones on a chart where heavy concentrations of sell orders tend to sit, and a move into one of these areas often triggers a price decline.

At the time of writing, sellers were yet to mount an aggressive push lower. This seemed to imply that buyers may be absorbing the supply and defending the level for now.

That resilience seemed to track with the fundamentals too as Pyth’s total value staked edged up to $44.22 million – An increase of roughly $8.92 million in the three days since 9 June.

Structure tells only part of the story behind whether $PYTH is truly positioned to climb though. Hence, the momentum indicators are worth looking at too.

Momentum indicators reinforce $PYTH’s upside

The first indicator behind this bullish case was the Average Directional Index (ADX) – A tool traders rely on to gauge whether a trend is strong. At the time of writing, the ADX hinted at $PYTH sitting within a strong bullish environment, leaving the probability for an upswing intact.

The Money Flow Index (MFI), which tracks the inflow and outflow of capital tied to an asset, showed more money moving into $PYTH. The indicator had a reading of 57 – Firmly inside the bullish region above 50. This seemed to be a sign that capital has kept flowing into the market.

That’s not all either as volume climbed by 21% to $41 million too. A simultaneous surge in both volume and price often signals growing bullish strength, raising the odds that the upside extends itself.

$PYTH’s positive funding rate signals fresh demand

Finally, what strengthens the case for $PYTH clearing the resistance barrier is the bullish tone in its perpetual futures market.

According to Coinglass, the average funding rate had a mildly positive reading of 0.0045% at press time.

A positive funding rate, paired with the surge in perpetual capital, implied that fresh money entered the leveraged market and more traders may be positioning themselves for further $PYTH upside.

This blend of rising perpetual capital behind a rally that is yet to overheat, a hike in staking, and steady capital inflows leaves $PYTH positioned for a sustained move higher.

Final Summary

• $PYTH rebounded 14% from a record low, a sign that buyers may be stepping back in after a heavy market-wide selloff.
• While a wall of sell orders sat above the press time price, rising demand and steady staking suggested the recovery may have room to run.