MYX Finance (MYX) had a rough start to the day, sliding 11% as market conditions shifted in favor of the bears on January 5.
Even though sellers remained in control, market data showed that buyers remained active, keeping the likelihood of a rebound high.
Why did the market fall?
The recent pullback appears linked to significant profit-taking in the perpetual market over the past day.
This activity is reflected in three key MYX perpetual indicators. Its open interest fell by approximately $16.7 million during the period, signaling a reduction in the total value of MYX contracts outstanding in the perpetual market.
Despite the scale of capital outflows, MYX’s total liquidations (positions forcefully closed after reaching stop-loss levels) remained limited to just $1.02 million.
This suggests that approximately $15.68 million worth of positions in the altcoin were intentionally closed by traders, likely taking profits rather than being forced to withdraw them. This may have briefly put pressure on the price as positions changed hands at lower levels.
Source: CoinGlass
Further reinforcing this view, the MYX open interest weighted funding rate remained positive throughout the decline.
A positive funding rate indicates that most open positions are bullish, suggesting that sentiment continues to lean higher despite the pullback.
On-chain business sees modest growth
On-chain activity has seen modest growth, although the protocol’s revenue remains relatively low, rising from $5 to $18.
Total value locked (TVL), which tracks the amount of liquidity committed to protocols, has continued to increase despite weak pricing.
Since January 1, TVL has increased by approximately $720,000, demonstrating sustained conviction among investors who continue to lock up tokens for periodic rewards and longer-term prospects.
Source: DeFiLlama
Additional measures reinforce this trend. The perpetual trading volume on decentralized exchanges has increased significantly.
Over the past day, the aforementioned volume increased by $66.24 million, while the cumulative volume over the past seven days reached $1.936 billion.
Rally or new decline?
The liquidation heat map supported a potentially bullish outlook for MYX as liquidity clusters remain largely concentrated above the current price.
These clusters represent areas of unfilled orders on the chart and often attract price movements, acting as liquidity magnets.
With more liquidity positioned above the price, MYX could attempt an upward move to fill these orders.
Source: CoinGlass
This view is further reinforced by the dominance of long positions in the perpetual market, strengthening the case for a potential rebound.
For now, the recent decline appears to represent a corrective phase, with the likelihood of a recovery remaining high.
Final Thoughts
- MYX’s decline is primarily the result of profit-taking in perpetual markets rather than forced liquidations.
- Despite the price decline, positive funding rates, an increase in TVL and increasing on-chain activity suggest that buyers have retained their conviction.
