Jupiter price dips – Can $26M Q4 holder income help JUP’s recovery

Key takeaways

What triggered the recent decline in JUP’s price and TVL? 

A major investor sell-off led to $128 million in outflows and a sharp drop in total value locked.

Are there signs of a potential recovery for JUP? 

Yes, rising token holder income and liquidity clusters suggest a possible bullish reversal despite current pressure.

Jupiter [JUP] suffered a major setback, similar to other asset classes, as the total crypto market capitalization slipped to $3.2 trillion.

Market analysis suggests the 15% decline in JUP’s price and the growing bearish sentiment are not the only factors in play, as bullish indicators continue to surface.

Here’s a full breakdown.

Massive sell-off pushes JUP lower

JUP’s recent price drop was driven by a major sell-off from long-term investors.

According to DeFiLlama, the token saw outflows of approximately $128 million, causing its Total Value Locked (TVL) to fall to $2.92 billion, as of writing.

This sharp decline in TVL suggests that investors are losing confidence in the token’s long-term value and the benefits of staking assets in its pools.

The derivatives market faced similar pressure, as the Open Interest Weighted Funding Rate fell into negative territory at -0.0203%, according to available readings.

A sharp decline of this nature implies that sell contracts now dominate buy contracts within the same timeframe.

Sustained funding favoring sellers over buyers implies that JUP will continue to face downward pressure, similar to what would occur if investors unlock more of their assets.

Spot buying supports JUP

Quarterly data shows JUP’s Token Holder Net Income for the third quarter has already outperformed the first and second quarters.

At press time, total income for this group stood at $26.33 million, trailing only the third quarter’s $51.94 million.

The jump in holder income, just 45 days into the fourth quarter, suggests a strong possibility that investors who recently exited, contributing to the TVL decline, may consider re-entering in the long term.

In the spot market, trading activity shows retail investors taking advantage of the recent price drop.

CoinGlass data reports that roughly $312,000 was spent buying JUP. While minimal and indicative of caution, it also suggests investors may ramp up purchases once they confirm market sentiment has turned positive.

Bullish setup remains in place

The liquidation heatmap suggests a rally could still form in the market.

This expectation stems from the limited clusters of liquidity available, which could attract price movement in their direction, even if not on an extended scale.

From current levels, JUP may attempt an upward move on the chart, guided by several liquidity clusters.

The largest cluster lies near $0.35, though liquidity remains relatively thin at that level. Still, market structure indicates a strong tendency for JUP to attempt a move to the upside.