Pyth Network Faces Market Challenges Amid Tariff Concerns and Token Unlock
The Pyth Network’s native cryptocurrency, PYTH, has experienced significant volatility, with a notable 12% decline in value over the past week. Currently, PYTH trades at approximately US$0.1346 (AU$0.1989), which is a staggering 88% drop from its all-time high of US$1.15 (AU$1.75) achieved on March 16, 2024. Market dynamics show a stark contrast between trading volumes on centralised exchanges (CEX), which reached US$36.3 million (AU$56 million), compared to a mere US$625,000 (AU$956,000) on decentralised exchanges (DEX).
PYTH has seen a price drop recently (source: CoinMarketCap)
Impact of Macroeconomic Factors and Token Release
The current downtrend appears largely influenced by macroeconomic uncertainties, particularly due to renewed tariff threats from former US President Donald Trump directed at the European Union. Additionally, a recent token unlock—which increased the circulating supply—has further pressured PYTH’s market value.
Token unlock events are strategically scheduled releases of coins aimed to prevent any sudden supply shocks. In this instance, 58.3% of the total circulating supply was unlocked, releasing 2.13 billion PYTH tokens from an overall cap of 10 billion. The initial supply of 1.5 billion tokens was made available upon launch in November 2023, with additional unlocks planned at intervals of 6, 18, 30, and 42 months.
Pyth token release schedule (source: Pyth Network)
Potential for Recovery Amidst Growing Network Value
Despite these challenges, analysts are hopeful about PYTH’s prospects. Traders from World of Charts project a potential price rebound, targeting a short-term rise to US$0.30 (AU$0.45). The increasing total value secured (TVS) within the Pyth Network—a measure of the assets under protection through staking, collateralisation, or insurance—has risen impressively from US$4 billion (AU$6.1 billion) to US$6.6 billion (AU$9.2 billion) over the past year.
Total value secured in Pyth Network (source: DeFiLlama)
A robust TVS enhances trust, mitigates risks, and helps stakeholders align their interests, thus providing a solid foundation for growth in challenging market conditions.
As the market evolves, analysts and investors will be closely monitoring the developments surrounding PYTH and the broader Pyth Network, assessing both macroeconomic factors and technical indicators to gauge the potential for recovery and growth.
