Jupiter [JUP] recently unveiled a buyback program aimed at purchasing and locking up JUP for three years using 50% of all protocol fees. This strategic move is designed to decrease the circulating supply, potentially leading to an increase in the token’s value. Investors are eagerly awaiting the market’s response as buybacks are scheduled to commence on February 17.
Response from the Market and Price Forecast
Following the announcement, JUP experienced a significant increase, surging by 8.82% to reach approximately $0.9255 at the time of publication. A closer look at the price chart indicates JUP’s attempt to surpass crucial resistance levels, namely the 50-day Moving Average (MA) sitting at $0.8951 and the 200-day MA at $0.9203.
A sustained breakout above the 200-day MA might signal a bullish trajectory, paving the way for a potential upward trend. Moreover, the Relative Strength Index (RSI) stands at 52.07, pointing towards a neutral momentum. Should buying pressure intensify, the RSI could climb towards overbought levels, further supporting a bullish outlook.
JUP Trading Volume and On-Chain Activity
With the buyback announcement, JUP’s trading volume witnessed a significant spike, reflecting increased investor interest. Data from DeFiLlama highlights a sharp rise in protocol fees, directly impacting the buyback allocations. In recent weeks, protocol fees have seen a substantial surge, reaching over $600K on a daily basis, a stark contrast to previous months’ levels.
This rapid escalation hints at a surge in user activity and revenue generation, reinforcing the sustainability of the buyback initiative. Additionally, JUP’s Total Value Locked [TVL] stands at approximately $2.7 billion presently, underscoring strong market confidence in the protocol. A higher TVL signifies improved liquidity and ecosystem expansion, potentially strengthening the positive effects of the buyback strategy over time.
Possible Scenarios for JUP
If JUP manages to surpass the psychological barrier of $1.00, it could face subsequent resistance levels near $1.10 and $1.20. Nevertheless, if the momentum falters, a revisit of the $0.85 support level, where previous buyers intervened, might be on the cards.
The gradual reduction in available supply due to the buyback mechanism could exert upward pressure on JUP. However, the long-term price action will heavily rely on market sentiment and broader cryptocurrency trends. Observers will closely monitor how buybacks impact liquidity and overall demand in the forthcoming weeks.