Concerns Arise in the Market as Traders Challenge Jupiter’s Decline Based on Core Aspects
Over the last 24 hours, Jupiter [JUP] has recorded a slight uptick, showing a 1.77% increase in an effort to offset its weekly drop of 4.21%.
While optimistic developments in its environment paint a promising picture, the bearish behavior of traders might overshadow this, potentially pushing JUP further down.
Can JUP’s essential factors withstand the pressure?
Jupiter Exchange, the platform associated with the JUP token, recently unveiled its intention to allocate 50% of transaction fees towards repurchasing JUP from the market.
This strategic move reflects Jupiter’s aim to diminish the circulating supply of JUP through active buybacks and hodling of the token. Such a tactic seeks to trigger a supply constraint, potentially leading to a surge in the altcoin’s value.
This approach would see an expenditure of $600 million for this purpose in the current year, constituting a quarter of JUP’s $2.4 billion market cap.
Despite the positive outlook of this fundamental aspect, the market players seem indifferent, with a noticeable decline in user engagement, exerting downward pressure on JUP.
Persistent Negative Influence
Data from Artemis indicates a significant plunge in market participation and interaction within JUP’s ecosystem, further weighing down on the asset.
On January 23, the daily transactions involving JUP hit 83,500, signaling encouraging growth. However, this figure has since dwindled substantially to 22,800 at present.
During the same timeframe, the daily active addresses (DAA) dipped from 855,800 to 801,800, marking a decline of 54,000.
The decreasing trend in active addresses and transactions implies a slowdown in ecosystem activity, potentially dragging JUP’s price below its current position.
What Lies Ahead for JUP?
Technical analysis reveals that JUP recently faced rejection at a critical resistance level within its trading symmetrical channel, where both support and resistance lines converge.
A rejection at the resistance barrier could signal a possible downward move for the asset.
In this scenario, there are two anticipated levels for a potential decline: an initial base support at $0.7904, followed by the primary support point of the symmetrical channel.
From this juncture, JUP may witness a rebound and attempt another breakout above the resistance level. A successful breach could propel the coin towards the peak of the pattern at $1.44.
On the whole, the current market activity suggests the likelihood of further downside for the altcoin, potentially dropping from the recently reclaimed $1 threshold.