FXS Crypto Price is Soaring: What Next for Frax Share Token?

Summary:
• FXS crypto price has made a strong recovery in the past few days as cryptocurrencies bounce back. Frax Share token jumped to a high of $9.96

The FXS crypto price has made a strong recovery in the past few days as cryptocurrencies bounce back. The Frax Share token jumped to a high of $9.96, the highest point since May 9 of 2022. It has jumped by more than 127% from the lowest level in 2022. That has given it a market cap of over $667 million, making it one of the top-performing tokens in the past few days. So, what next for the FXS token?

What is Frax Share and why is it rising?

FXS is the native token for Frax Finance, one of the biggest players in the blockchain industry. It describes itself as the world’s first fractional stablecoin protocol. It is an open-source and entirely on-chain protocol that exists in 12 blockchains like Ethereum, Dogechain, Polygon, Fantom, and BNB Chain among others. 

Frax runs to stablecoins: FRAX which is pegged to the US dollar and FPI, which is pegged to the US consumer price index (CPI). At the same time, the Frax Finance economy has two stablecoins: Fraxswap and Fraxlend.

Frax Finance has a total value locked (TVL) of more than $1.38 billion while Frax has a TVL of over $1 billion. Further, Fraxlend, FraxSwap, and Frax Ether have over $147 million, $63 million, and $93 million, respectively. 

The FXS crypto price rallied as investors focused on the improved market performance in the ecosystem. Data shows that Frax Finance has hit 61.3k $frxETH as Ethereum inflows surged, as shown below.

FXS price has also rallied because of macro factors, as I wrote in my latest article on Zilliqa. Data published last week showed that inflation in the United States continued dropping in December as the price of most goods turned south. As such, with some analysts calling for a deflation in 2023, there is optimism that the Fed will slam brakes on rate hikes.

FXS crypto price forecast

The daily chart shows that the Frax Share price has been in a strong bullish trend in the past few days. FXS rose above the important resistance points at $7.64 and $8.02, the highest points in August and November. The token surged above the 25-day and 50-day moving averages. At the same time, the Relative Strength Index (RSI) has moved to the extreme overbought level of 87. The Stochastic Oscillator has also become extremely overbought.

Therefore, there is a likelihood that the FXS crypto price will retreat and retest the key level at $8. A move above this week’s high of $10 will invalidate the bullish view.