Jupiter [JUP] has introduced a new buyback strategy, dedicating 50% of protocol fees to acquiring JUP tokens and locking them up for a three-year period.
The primary goal of this initiative is to decrease the available supply, potentially leading to an increase in the token’s value. Investors are eagerly anticipating the start of buybacks on February 17th and monitoring the market’s response.
Response from the Market and Price Forecast
Subsequent to the announcement, JUP displayed a noticeable upward trend, surging by 8.82% to hover around $0.9255 at the current moment.
An analysis of the price chart indicated JUP’s attempt to reclaim significant resistance levels, with the 50-day Moving Average (MA) at $0.8951 and the 200-day MA at $0.9203.
A sustained breach above the 200-day MA could signal a bullish momentum shift, possibly paving the way for a forthcoming rally.
Moreover, the Relative Strength Index (RSI) stood at 52.07, indicating a neutral momentum state. If buying pressure intensifies, the RSI might approach overbought levels, further reinforcing an optimistic outlook.
JUP Trading Volume and On-Chain Activities
The announcement of the buyback program triggered a surge in JUP’s trading volume, reflecting increased investor attention. DeFiLlama’s data illustrated a significant rise in protocol fees, directly impacting the buyback allocations.
In recent weeks, protocol fees have seen a substantial upsurge, reaching daily peaks exceeding $600K, a stark contrast to previous months’ significantly lower levels.
This rapid escalation suggests a burgeoning user engagement and revenue generation, bolstering the sustainability of the buyback mechanism.
Furthermore, JUP’s Total Value Locked [TVL] stood at approximately $2.7 billion at present, signifying robust market trust in the protocol.
A higher TVL denotes increased liquidity and ecosystem expansion, potentially strengthening the positive effects of the buyback plan over time.
Possible Scenarios for JUP’s Future
If JUP manages to surpass the psychological barrier of $1.00, it could encounter further resistance levels at $1.10 and $1.20.
However, a failure to maintain its momentum might result in a retesting of the $0.85 support level, where buyers had previously intervened.
JUP could face gradual upward pressure as a result of the buyback scheme diminishing the available supply.
Nonetheless, the overall market sentiment and broader cryptocurrency trends will play a pivotal role in shaping the token’s price trajectory in the long run. Investors will be closely monitoring how the buyback program impacts liquidity and overall market demand in the upcoming weeks.