OKB price surged by 15% today, August 20, resuming an uptrend that started last week when OKX announced a massive token burn.
Summary
- OKB price resumed its upward trend and neared its monthly high.
- It could be at risk of a plunge as the funding rate turns negative.
- Wyckoff analysis hints that it may move to the distribution phase.
OKB (OKB) soared to a high of $140, up 220% from its lowest point this year, bringing its market capitalization to $2.9 billion. Its daily volume jumped to $330 million. Still, this rally may be about to end as the funding rate turns negative.
OKB price at risk as the funding rate turns negative
OKB, the native token of OKX, a leading crypto exchange, surged last week as the developers announced a major change in its tokenomics and technology.
OKX upgraded to Polygon’s X Layer, which boosted throughput to 5,000 TPS, reduced gas costs, and improved its security and compatibility. Data show that over 90% of the OKX tokens have moved to the X Layer.
The developers also decommissioned OKTChain because of its overlap with X Layer. Most importantly, they reduced the number of OKB token in circulation to 21 million. They did that by executing a single-instance burn of 65.2 million tokens that it had repurchased.
The next potential catalyst for the OKB price is the rumored OKX IPO in the nied States. This listing may happen this year after the successful Circle and Bullish IPOs.
However, in the near term, the OKB token could be at risk of a reversal as the funding rate plunged. CoinGlass data show that the eight-hour funding rate dropped to -0.011%, its lowest point since August 17. A falling funding rate is a sign that investors anticipate the future price to be lower than where it is today.
OKB token technical analysis
The daily timeframe chart shows that the OKB price surged last week after the token burn announcement. Before that, it was in a prolonged consolidation as part of the accumulation phase of the Wyckoff theory.
The surge was part of the markup phase, which is characterized by higher demand and fear of missing out. As such, there is a risk that it will soon enter the distribution phase and crash.
More indicators, like the Relative Strength Index and the Stochastic Oscillator, show that it has become highly overbought. Also, it has moved much higher than the 50-day and 100-day moving averages, putting it at risk of a mean reversion.
If this crash happens, the OKB price could crash to the support level at $64, the swing high in November last year.
