Amid FTX ‘exit pump’ fears, Serum (SRM) price rose 140% in one week. Despite major cryptocurrency exchanges delisting SRM, it did not stop the altcoin price from rising sharply.
Altcoin price increased 140% in a week
Serum, a ‘decentralized exchange’ on the Solana Blockchain, has performed exceptionally well in terms of SRM price despite being tied to the defunct FTX exchange. On the daily chart, SRM is up 140% in the last seven days. The altcoin hit $0.319 on November 21 from $0.177 on November 14. This increase brought its circulating market value to approximately $73 million. In the maximum supply circulation, the market capitalization increased to approximately $2.8 billion.
“Close to zero”
The SRM price rose despite the ongoing delisting of Serum trading pairs on major crypto exchanges including Binance, OKEx, Gate.io, and Phemex. This has increased fears of an ongoing exit pump. In the exit pump, large investors pump the token price in a low liquidity environment to attract new buyers. However, they later dump all their holdings on amateur investors, as is the case with many pump-dump schemes.
cryptocoin.comAs you follow from , distrust of Serum has increased due to the FTX effect. In a bankruptcy filing filed Nov. 11, a leaked balance sheet revealed that FTX owed $8 billion against a reserve of mostly illiquid assets, including SRM.
FTX showed approximately $5.4 billion worth of SRM tokens in its reserves. That’s almost 97% of the total market value of Serum, including the circulating and fully diluted supply. As a result, the FTX effect in the token has increased the likelihood of a large sale. Bloomberg’s Columnist Matt Levine comments:
If FTX dumped them on the market for a week, month, or year, it would fill the market and lower the price. Maybe they could make a few hundred million dollars. But I think a realistic assessment of this huge stash of Serum would be close to zero. This is not a review about Serum; this is a comment on the size of the stash.
Serum community forks to sever ties with FTX
The SRM price rally over the past seven days has coincided with efforts to move Serum away from FTX. Serum supporters witnessed suspicious outflows of $266.3 million in FTX-related wallets on Nov. Later, they put their weight on an emergency ‘community fork’. Brain Long, one of the popular validators on Solana, noted that the fork refreshes the market’s sentiment in SRM.
Still, Serum’s fork failed to attract fresh capital into its liquidity pools. As of November 21, the total value (TVL) locked in Serum’s reserves was only 33,900 SOL. For comparison, TVL was 3.3 million SOL at the start of the month.
Altcoin price crash ahead?
Meanwhile, crypto analyst Yashu Gola takes a technical look at Seruma and shares the following analysis. SRM is considering the possibility of going through big sales in the coming weeks. The bearish argument stems from the descending triangle pattern on the daily chart. This chart coupled with the previous SRM price downtrend indicates more bearishness ahead. Because Descending Triangle patterns are trend continuation setups.
Therefore, the altcoin is now seeing a potential break below the lower trendline of the triangle near $0.234. A successful break below the mentioned support risks sending the price to a level of length equal to the maximum distance between the upper and lower trendline of the triangle.
In other words, the altcoin price risks falling to $0.10, or 65%, by December 2022. Conversely, a break of the upper trendline of the triangle near $0.30 is possible, causing the token to test its 50-day exponential moving average (50-day EMA; red wave) at $0.56 as the next major upside target.
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