Raydium crypto flips $1 – Can $190M in buybacks sustain RAY’s rally?

Raydium [RAY] is experiencing strong upside momentum. After holding $0.80, the altcoin rallied to flip $1, touching an 8-month high of $1.19.

At press time, Raydium was trading around $1.09, up 33% on the daily charts. At the same time, trading volume soared 876% to $114 million while the market cap surged 32%.

Such a strong jump in volume pointed to extremely high market activity, especially on the bullish side. 

Raydium’s 86% token buybacks lower market pressure

Market participants have noted that the protocol’s buyback program has gone a long way to stabilize the market. 

According to Mst|Raydium, the Raydium Protocol is currently fully aligned with the token. As such, 86% of the protocol’s total revenue goes directly to token buybacks. 

For example, on the 31st of August, Raydium announced its fee-funded buyback program and purchased more than 30% of the total RAY circulating supply. In fact, the protocol has spent $190 million in cumulative buybacks to acquire over 69 million RAY. 

Raydium routes 12% of every swap fee to open market RAY purchases across three pools.  At the same time, the treasury holds the rest with 4% from swap fees. This arrangement has so far supported future demand and reduced market pressure.

In addition to buybacks, Raydium supply from the open market is being absorbed by staking.  In fact, staked supply has been continuously rising, reaching $36 million at press time. 

Like buybacks, a rising staked amount reduces supply, which in turn creates lower selling pressure.

Profit takers aggressively cashing out

As expected, after Raydium rallied to January levels, holders who had been underwater rushed to cash out gains. The altcoin’s Spot Netflow climbed to a four-month high of $561k. 

This rising spot inflow seems to be coming from small whales who have unstaked. The on-chain monitor reported that 260k RAY were unstaked and deposited to Binance. 

Additionally, 191k tokens were unstaked and deposited to Gate. Notably, the two batches account for 451k RAY worth $500k.

Can RAY’s uptrend hold?

Although some holders have cashed out recent gains, staking and buybacks have significantly absorbed market pressure.

For that reason, Raydium’s upward momentum holds firmly. The Relative Strength Index (RSI), for example, climbed to an overbought level, hiking to 84 as of writing.

The RSI at such levels reflects dominant buying pressure. Furthermore, the DI+ of the Directional Movement Index (DMI) formed a bullish crossover and jumped to 54, thus confirming the current trend.

With RSI and DI+ both on the rise, they point to the likelihood of the bullish trend continuing. Therefore, under these conditions, Raydium is likely to target $1.26.

Final Summary

• Raydium  surged 33%, flipped $1, and climbed to an 8-month high of $1.19, then slightly retraced to $1.09. 
• RAY’s bullish momentum has been held, driven by the token 86% buyback program and rising staked RAY.