GMX, the native token of GMX, a decentralized perpetual exchange for trading complex cryptocurrency derivatives, is facing significant selling pressure at the time of writing on August 11.
The tracker shows the governance token is down 7% in the last trading day, bringing monthly losses to 24%. The downturn has caused prices to fall close to $40, a key support level last posted in January and June 2023.
Whales dump, prices fall
Despite this setback, DeFiLlama’s data remains stable, with GMX’s total locked value (TVL) still exceeding $534 million. Most of the exchange’s liquidity is locked in Arbitrum, Ethereum’s layer 2 scaling solution. In addition, another portion is locked in Avalanche, a fourth-generation Ethereum-compatible smart contract platform focused on decentralized finance (DeFi).
The August 11 sell-off coincided with the actions of GMX "whales." Lookonchain data shows that four whales sold 62,274 GMX, worth $3 million. Address "0xb824" liquidated 19,786 GMX, equivalent to 514 ETH, and "0xa38a" sold 11,667 GMX for 305 ETH, losing $50,000 in the process. Meanwhile, "0X85b7" sold 20,000 GMX for 510 ETH, and "0x0b80" followed suit, selling 10,820 GMX.
As DeFi's TVL continues to decline, whales are selling. This contraction can be traced back to the general cooling since the end of 2021, when cryptocurrency prices peaked before the 2022 decline, causing a collapse in on-chain activity, especially in the DeFi sector. At the spot rate, the token is changing hands at $46, down nearly 50% from $91 in the second quarter of 2023. Even so, the token is still up nearly 4 times from its all-time low.
Still, the whales’ actions could send ripples of uncertainty throughout the GMX and DeFi communities. Crypto traders actively track whale activity. Often, when they sell off, as was the case today, it can sow seeds of fear, causing others to follow suit, putting even more pressure on prices.
GMX launches v2 beta
On August 6, GMX launched the v2 beta on Arbitrum and Avalanche. The exchange said the version introduces several enhancements, including support for more assets, including XRP. With v2, users can also leverage different collateral types to trade positions while making faster trades with lower fees and reduced slippage.
The exchange added that in v2, segregated pools were introduced for liquidity providers to customize their exposure to preferred tokens. The version also incorporates enhanced incentives for balancing open interest, providing a strategic way to hedge pools against fluctuations in trader profits.