Perp price is down by over 6 per cent in today’s trading session. This is after yesterday’s aggressive session which at one point had risen by 30 per cent before dropping and closing the session at 10 per cent. Before the current bearish trend that started late in yesterday’s session, Perp price had risen by over fifty per cent in four days.
What is Perpetual Protocol
Perpetual Protocol (PERP) is an Ethereum token that powers Perpetual protocol, a decentralized exchange platform for perpetual contracts. Users of the platform are able to place long and short trades on assets such as fiat currencies, cryptocurrencies, and gold.
According to the platform, perpetual contracts offered on the platform in most cases mirror how futures operate. However, unlike futures, the perpetual contracts do not have an expiration date or settlement, allowing them to be held or traded for an indefinite amount of time. The Perpetual Protocol trading platform is made possible by the use of a Virtual Automated Market Maker (henceforth referred to as a “vAMM” or “vAMMs”).
Perpetual Protocol Price Prediction
Today’s trading session has seen Perpetual protocol dropping by six per cent. This is despite the past few days’ price gains of over 50 per cent. However, today’s price drop is not surprising. This month, the price of Perp has dropped by 57 per cent. Looking at the year to date data, the prices have also dropped by 84 per cent.
Looking at the chart below, we can see that, despite the recent bullish price action, the prices are still in a long-term bearish trend. Therefore, it is likely that the current price drop is a resumption of this trend. I expect the prices to continue falling, with a likelihood of hitting the recent support level of $1. There is also a high likelihood of the prices trading below the $1 price level in the next few trading sessions.
However, if the prices trade above $1.5 before today’s trading session ends, then my analysis will be invalidated. It will also mean a possible bull run or a sideways market.