Crypto bulls are back while the NFT market is still strong. LOOKS, the cryptocurrency native to the LooksRare NFT platform, is one that traverses both segments.

LOOKS was trading at USD 2.66 as of going to press after rising impressively from the February 24, 2022 low of USD 0.79. Simply put, the altcoin was valued at 233%. The last run started on March 22. However, it is worth noting that, despite its uptrend, LOOKS still has a long way to go before it can break its previous all-time high of $7.08.

As expected, the crypto’s strong rally has coincided with a significant increase in trading volume, especially in the past two weeks. In fact, it also corresponded to a drop in supply on the exchanges from about mid-March – a sign that selling pressures have eased across the board as far as the alt is concerned.

Source: Santiment

On closer inspection, a declining pattern can be seen in the supply of cryptocurrencies on exchanges from around March 22. Interestingly, this also happened to be around the same time that the project’s activity stat registered a surge. This statistic is usually a sign of confidence in the long-term health of a project, one that isn’t always tied to the price rise or depreciation of the crypto itself.

The same peaked on March 29 after LooksRare announced the launch of LOOKS Compounder.

Finally, according to Saniment,

“LOOKS’ MVRV 7D, which measures holders’ short-term gain/loss, shows that we’ve entered the danger zone, where in the past short-term holders who have been well in profit … took some off the table.”

Source: Santiment

Why LOOKS Compounder is so important to LOOKS price action

LOOKS Compounder is a tool that automatically converts WETH into LOOKS. For many, it is promised as the best way to save on gas costs. On the back cover of the said update, LooksRare also revealed that more than 45 million LOOKS (worth $119.7 million) have already been deployed. What this means is that about 18% of the cryptocurrency’s market cap of $657.3 million has been staked.

Ergo, the question: is the uptrend in the crypto’s price action too good to last? Well, probably.

Technical indicators such as the RSI and MFI seem to indicate that it is currently overbought and may be ready for a correction. Still, the long-term price action looks promising, especially given the recent developments and the growth of the project.

This post Looks like the short term was good but this is coming

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