DYDX price crashes 12% after dYdX auto deleverages profitable traders closing their trades

dYdX, the decentralized exchange, experienced a significant crash in its DYDX token price, plunging 12%, following a system deleveraging event that closed profitable trades. This came after the altcoin had already dropped 30% due to a market-wide crash sparked by the news of the denial of spot Bitcoin exchange-traded funds (ETFs) by the US Securities and Exchange Commission. The system deleveraging event occurred when a large price movement caused many accounts to be liquidated, resulting in the order book running out of liquidity to close the affected accounts. As a result, the system had to close profitable accounts against the liquidated ones. Despite these challenges, analysts predict that DYDX may experience a 15% rise in price due to increasing momentum and a strengthening recovery rally. However, if the altcoin records a daily close below the 200-day Simple Moving Average (SMA) at $2.350, the bullish thesis would be invalidated. dYdX has since implemented measures to improve risk controls and prevent similar incidents in the future. Overall, the outlook for DYDX remains uncertain, with potential for both further gains and a continuation of the downward trend.