Driven by Bitcoin reaching an all-time high and RAY's increasingly dominant position in the Solana ecosystem, the price of Raydium (RAY) has risen by 30% in the past few days. The protocol's impressive returns have solidified its leading position and fueled bullish sentiment for its token.
However, like any rebound, there may still be a pullback before prices rise further.
Does this reflect Raydium's performance?
The Solana blockchain has maintained strong utility in 2024, and Raydium, as one of the top DEXs, has benefited from this.
Just 12 months ago, Raydium's TVL was worth less than $40 million, with token liquidity below $10,000.
Both of these indicators have seen impressive growth recently, with TVL peaking at $2.08 billion in October but subsequently falling back to $1.5 billion. Meanwhile, RAY token liquidity has surged to $597 million.
The growth of TVL and token liquidity highlights the growth momentum of Raydium DEX in 2024, in line with the growth of the Solana ecosystem.
However, this growth and network activity are more evident in Raydium's revenue and trading volume data.
Trading volume and revenue peaked in March, June, and October, with declines during the remaining periods.
For example, the highest trading volume of the token since the beginning of 2024 was in March, at approximately $406 million. Meanwhile, the highest revenue in March was $395,000.
Latest data shows that since September, both trading volume and revenue have been on the rise. This reflects the surge in activity during bull market months.
This is also consistent with the observation that the same indicator declines during economic downturns or bearish months.
Based on the observations above, it is clear that DEX activity has a significant impact on RAY demand. As the bull market intensifies, this trend may continue.
RAY RSI now shows an overbought phase.
The price of Raydium (RAY) surged by 30% in recent days, with its RSI jumping from 45 to above 70. This sharp increase indicates strong buying momentum, pushing the asset into the overbought region.
Such a high RSI level typically indicates that prices may have risen too quickly, potentially leading to a short-term pullback.
RSI, or Relative Strength Index, is a momentum indicator used to assess whether an asset is overbought or oversold. Typically, an RSI below 30 indicates that an asset is oversold, suggesting it may be undervalued. Conversely, an RSI above 70 indicates overbought, meaning the asset may be overvalued.
RAY's RSI is now above 70, indicating that the token may soon face a correction, as current levels suggest an overbought phase. Before attempting to set a new recent high, RAY may need to cool down and establish more stable support.
In short, despite such outstanding performance, RAY still has considerable room for growth before reaching its historical peak. The token peaked at $17.80 in August 2021. A short-term pullback may still occur due to RAY being severely overbought at present. The token exhibits bearish divergence, with lower RSI peaks. Additionally, MFI has been declining, indicating profit-taking is occurring.
RAY Price Prediction: Is a 44% correction imminent?
The RAY price is approaching its highest level since 2022 and may soon break above the $5 mark. However, a strong pullback may occur before that.
Market conditions often fluctuate, and if buying momentum wanes, the current optimistic levels may be tested.
The EMA line of RAY shows a bullish trend, with the short-term EMA above the long-term EMA, maintaining a healthy distance between the two. This indicates that it is currently in a strong upward trend. If the upward trend continues and the RSI remains stable without a pullback, RAY may break through the $5 level and continue to rise.
On the other hand, if bearish pressure occurs, prices may retrace to the strong support area of $3.11 or even $2.6, which means a potential pullback of 44% from current levels.
