Pyth Network (PYTH) continues to maintain its upward trend, recording an additional increase of 2% on Monday, extending the nearly 10% breakout on Sunday. This bullish momentum is reinforced by renewed activity on the network alongside the continuously increasing open interest. Technically, the outlook remains tilted towards a positive trend as PYTH has just surpassed a resistance level that has lasted for eight months, opening up new growth opportunities.
The increase in transaction volumes – a signal indicating that the network is operating robustly
According to data from DappRadar, activity on the Pyth Network has seen a significant breakout over the past 90 days. Specifically, on Sunday, the network recorded up to 213,640 transactions – a notable increase compared to the 170,890 transactions on Wednesday of last week.
The strong increase in transaction volume reflects a growing dynamism in the user community, thereby contributing to the demand for the native PYTH token.
Optimistic sentiment drives OI to soar
According to data from CoinGlass, the open interest (OI) of PYTH has increased from $50.54 million on Sunday to $54.79 million. This significant increase reflects a strong inflow of capital into the derivatives market, indicating growing interest from traders in this asset.
PYTH's recovery aims for double-digit growth
As of the time of writing, PYTH continues to report an increase of nearly 2%, marking the seventh consecutive gain – extending the impressive recovery of 9.87% since Sunday. This momentum has helped the price surpass the 100-day exponential moving average (EMA) at $0.1330, while also breaking through a resistance level that has persisted for eight months, established from two peaks on December 3 and May 14, at the level of $0.1371.
However, the current upward trend is facing challenges at the key resistance area of $0.1489 – the old peak formed on May 22. If the price can decisively close above this level, PYTH will have the opportunity to extend the breakout to the next target zone at the Fibonacci 38.2% level, corresponding to $0.1684. This Fibonacci level is measured from the peak of $0.5533 (December 3) to the bottom of $0.0807 (June 22).
However, a warning signal is emerging from the Money Flow Index (MFI) on the daily chart, as this indicator continues to rise high and deep into the overbought zone, currently reaching a level of 89. An MFI approaching 90 typically indicates that buying pressure has reached extreme levels and may not be sustainable, increasing the likelihood of a correction or accumulation phase in the short term.
In a corrective scenario, the 100-day EMA at $0.1330 could serve as a short-term support. However, if the price slips below this line and the Fibonacci 23.6% level at $0.1271, the previous breakout signal will be negated. In that case, a downtrend may be triggered again, pulling the price further back towards the 50-day EMA at $0.1179.
