Convex Finance [CVX] rallied significantly in the past day. The asset reached this level following a 22% increase in value to $260 million, while trading volume came closer to $26.66 million.
The gain followed an inflow of capital into CVX’s on-chain market, alongside a surge in the number of holders. Perpetual market activity also shows that traders are positioning for a possible upward rally.
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CVX holders and income reach new highs
In the past day, as CVX surged, there was a clear increase in the number of token holders, who reached an all-time high of 32,410. Between the 12th and the 21st of October, the number of CVX holders increased significantly, with 500 new holders added to the market.
A surge in the number of holders often indicates an inflow of capital into the asset. Another contributing factor has been Token Holder Income, which has performed relatively well since the start of October.
Roughly $499,000 has already been paid to Convex Finance holders this month.
On-chain activity supports CVX’s rally
A surge in on-chain capital flow has helped support CVX’s price performance.
Total Value Locked (TVL), which tracks the value of capital deposited in a protocol, has gradually increased over the past couple of days. Between the 15th and the 21st of October, TVL surged by roughly $30 million, according to data available at press time.
A surge in TVL implies that investors are likely depositing more capital into the protocol because they anticipate that the asset will continue to perform well in the near term.
Likewise, there have been notable spikes in the fees generated by the protocol during this period, pointing to growing platform usage.
Within the same period as the TVL increase, fees generated rose from $25,626 to roughly $137,430 at the latest count, according to DeFiLlama. Growing activity and increased adoption of the asset add to its bullish market performance.
Positive Funding Rate backs bullish outlook
Perpetual market activity reflects the same bullish outlook, with CVX’s Funding Rate remaining positive at 0.021%.
A positive Funding Rate indicates that long traders are paying funding fees to maintain their positions relative to short traders in the perpetual market.
Typically, this occurs when traders expect the price to continue moving in the direction of the prevailing trend, which, in this case, is bullish.
A continued positive Funding Rate would imply that the asset is likely to maintain its bullish stance in the near term.
Final Summary
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Convex Finance rallied as token holders reached an all-time high of 32,410, with Token Holder Income hitting roughly $499,000 this month.
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CVX’s TVL increased by $30 million, while protocol fees rose to $137,430, and the Funding Rate remained positive at 0.0021%.
