DeXe [DEXE] has sat on the bearish side of the market, with sellers controlling the price dynamic. The asset has plunged 84%, wiping out every gain it accrued between the 14th of March and press time.
Its price dropped from $46.79 down to around $4.76 on the chart.
AMBCrypto explores the possible factors that could have driven such a massive wipeout and what the next step might be for the asset, especially as it struggles in a market where liquidity is already thin and rotating into just a few tokens.
Capital outflows deepen, and the base shrinks
Capital outflow across both segments of the market – Spot and perpetual – has driven DEXE’s decline.
A shrinking capital base in the spot market has weighed heavily on the drop, with $124.88 million worth of DEXE sold between the 20th of July and the time of writing.
Typically, the amount sold shouldn’t matter if buying pressure meets it in the market. In this case, though, the buying pressure doesn’t match up. The data shows the difference between inflow and outflow amounted to a $19.69 million net outflow.
A net outflow of this scale often implies minimal buying pressure from the market, and this time it hands sellers the edge.
The perpetual market witnessed the same outflow. The total capital exiting reached roughly $18.35 million, about 23% of the previous day’s value, a move sparked by concerns over the market’s volatile state.
Is DEXE undervalued?
A gain wipeout this significant raises the question of whether the asset remains a good buy, especially given that DEXE still sits 33% up on a year-to-date basis.
Chart analysis shows the asset is undervalued using the Bollinger Band indicator. For context, the Bollinger Band uses two levels to mark undervaluation and overvaluation—the lower band for the former and the upper band for the latter.
DEXE has now traded into the lower band, and typically when the price trades at this level, it sees a rally, potentially reaching the middle band – in this case, $30.6 – or trending even further to reclaim previous levels.
There’s no confirmation yet that price will rebound from this level immediately, and it could consolidate further before picking up strength.
On the positive side, the recent decline reflects massive deleveraging that would help reset the market after it carried excessive leverage. Funding still shows seller dominance, but it has reduced from the peak selling period.
FUD could drive further selling
According to DeFiLlama, the community sentiment shows a surge in mindshare, reaching a high of roughly 227%, with over 8,510 post reactions to the asset.
Yet investor sentiment from this mindshare remains largely bearish, with a negative 2.46 reading. If the negative reading keeps trending lower on the chart, it implies more sell pressure ahead, with FUD driving the sell-off more than any actual fundamental basis.
Structurally, the chart shows massive deleveraging and marks DEXE as undervalued. Right now the selling reflects FUD more than fundamentals, given the asset’s potential for recovery.
Final Summary
- DEXE has shed 84% since the 14th of March, dropping from $46.79 to around $4.76 as buying pressure failed to meet the exit.
- Bearish sentiment and heavy FUD suggest sellers still hold the edge before any confirmed rebound.