Pyth Network Could Double in Price as Trading Volumes Explode by 9,000%

Pyth Network (PYTH) has experienced one of the most remarkable single-day rallies in the history of crypto as the token has gone up by more than 100% in just 24 hours after the U.S. government tapped this protocol to disseminate economic data.

Trading volumes during this period have surged to an eye-popping 9,836% to $2.87 billion, accounting for 205% of the token’s circulating supply at the time of writing.

Pyth Network (PYTH) 24H Chart – Source: FXEmpire

A short-squeeze seems to be partially responsible for what’s happening to PYTH. Ironically, despite this strong price surge, the token is still sitting on a 12-month loss of 18.3%.

Before the news broke, these losses were much higher at 58.4% as Chainlink’s dominance in the price oracle market was indisputable.

However, the fact that the project has been selected by the U.S. federal government may have boosted its credibility.

Big Credibility Boost Could Propel PYTH’s Market Cap

In a press release published yesterday, the developing team commented: “With its vast network spanning over 100 blockchains and the 600+ applications that depend on it for trustworthy data, Pyth has quickly become the source of truth for onchain data.”

It also highlighted that “as the finance industry and U.S. government continue to push further into the digital frontier, Pyth’s distribution is poised to become the primary channel that fuels their growth.”

Protocols like Pyth Network create a bridge between blockchains and real-world data by providing reliable price feeds called oracles that can be used to tokenize real-world assets (RWA).

In the case of this latest collaboration with the government, Pyth Network will bring data from the Bureau of Economic Analysis (BEA) like the U.S. gross domestic product (GDP) and key inflation metrics to the blockchain.

In contrast to PYTH, Chainlink (LINK), which was also tapped by the U.S. government for this same project, did not experience a similar price boost. In the past 24 hours, the token has booked a 0.8% loss, pretty much in line with the overall bearish tone of the market.

Confirmed Breakout Above $0.30 Would Set the Stage for a Move to $0.55

The daily chart shows how massive this latest price surge has been as it has fully reversed an 8-month-long downtrend that started after PYTH hit $0.55 in December last year.

PYTH/USD Daily Chart (Kraken) – Source: TradingView

The token has started to retreat from a key resistance at $0.25 during today’s session. The market cap of the token hit $1.4 billion at that point. Hence, its psychological relevance is minor compared to the $2 billion level.

We could expect a major breakout to $0.30 within the next few days if bullish momentum continues. A pad in the back like the one the U.S. government gave this project is not a minor feat for a relatively unknown blockchain project.

It could propel its market cap to the point that surpasses less reputable projects like Pi (PI) or Algorand (ALGO) whose real-world use cases are limited compared to Pyth.

Being selected by the federal government means that the project has been vetted by experts, especially to fulfill such a critical task as disseminating sensitive economic data.

The price has surged above the 200-day exponential moving average (EMA) as well and, after a brief retest, it could continue its path to $0.55. This means that the token’s market cap could rise to $3.2 billion, which would make Pyth Network as valuable as Near Protocol (NEAR) and OKB (OKB).