DODO price soars by 80%: sell or wait for the rally to continue
Date: 2023-08-10 Author: Karina Ziganova Categories: BLOCKCHAIN
The price of DODO soared by 80% after cryptocurrency exchange Binance launched a DODO/USDT perpetual futures contract with up to 25x leverage.
Dodo is an algorithmic liquidity provider that uses a unique Proactive Market Maker (PMM) mechanism to maintain price stability. This week, the native token of the platform attracted the attention of investors, demonstrating impressive growth against the backdrop of a virtually static crypto market.
Why the price of DODO is rising
On Monday, Binance announced the launch of the DODO/USDT Perpetual Futures Contract.
Futures contracts, or simply futures, are a financial product that obliges a party to buy or sell an asset at a predetermined price. Simply put, this is an agreement that makes it possible to conduct trading operations with crypto assets without the fact of owning them. The main difference between futures contracts and options contracts is that the parties to a futures contract are required to buy or sell it regardless of profit or loss.
On-chain data shows that within 24 hours of the Binance announcement, activity on the DODO network jumped to a 7-month peak. This momentum set the stage for the price rally that followed.
Retail investors remain optimistic
After yesterday's close of trading at $0.13, the price of DODO gradually decreased to $0.11. However, many retailers remain confident that the rally will continue.
After the announcement by Binance, the number of active DODO addresses per day increased by 290% - from 54 to 209. However, even when the price corrected by more than 25% compared to the peak value of $0.178, their number did not decrease, but, on the contrary, reached 439.
This behavior of retail participants in the network is considered a bullish signal, indicating a growing interest in the asset. Largely due to this, the price of DODO keeps the support level of $0.11.
Traders prepare for a sell-off
However, the cumulative order books show that some traders still plan to take profits despite optimism about DODO. According to IntoTheBlock, market participants placed orders to sell 11.7 million and buy 8.1 million coins at the current price.
When the number of active sell orders exceeds market demand, it signals that the asset is on the threshold of correction. Thus, the DODO price rally may gradually fade away.
DODO Price Prediction: Potential Correction to $0.10
Considering the factors listed above, in the coming days, the price of DODO is likely to approach $0.10. The 238 addresses that purchased 4.02 million coins at a minimum price of $0.11 will provide some support to the asset. But if they fail, the price of the token will continue to fall.
In case of fixing above $0.16, the bulls will take the initiative. However, 313 wallets that bought 44M DODOs at an average price of $0.13 could slow down the rally or even trigger a reversal.
