Perpetual Protocol has suddenly woken up. PERP, its native token, has been one of the best-performing cryptocurrencies this week. It soared to a high of $0.8742 on Tuesday, the highest level since April 2023. It has jumped by more than 90% from the lowest level this month even as the crypto winter continued.

Perpetual Protocol TVL soars

Perpetual Protocol is a small but fast-growing player in the DeFi industry. It is a platform that enables users to trade cryptocurrencies with lower costs and faster speeds. It is one of the top platforms in Optimism, the giant layer-2 network.

In addition to trading, Perpetual Protocol’s platform enable users to earn a share of the revenue in the form of USDC and PERP token. The yields on these coins are relatively higher than in competing platforms. For example, its APR was 10.77% last week, which is higher than the risk-free rate of ~4% and inflation rate of 3.2%.

It is unclear why Perpetual Protocol’s token is soaring. There are two main potential reasons for this. First, the rally is likely because of the soaring total value locked (TVL) in its ecosystem.

Data shows that the amount locked in its platform soared by over 40% in the past 24 hours to over $35 million. It has jumped by more than 20% in the past 30 days.

Second, this could be a random pump, which are popular in the crypto market. Other tokens that are pumping are CyberConnect, Flamingo, Enjin Coin, and Bluzelle.

The final reason is that investors are anticipating a major news event from Perpetual Protocol. In many periods, cryptocurrencies tend to rally ahead of a major event. This is notable for Perpetual Protocol since the developers have not made any announcement for a while.

Perpetual Protocol price forecast

The daily chart shows that the PERP price has made a strong bullish recovery in the past few days. It has soared from this month’s low of $0.3940 to a high of $0.8641. As it rose, the coin jumped above the important resistance point at $0.5816, the highest point on August 14th, July 14th, and July 1st,

Perpetual Protocol has also jumped above the 200-day and 50-day moving averages, which is a bullish sign. The Relative Strength Index (RSI) has moved to the extremely overbought price.

Therefore, I suspect that the Perp price will soon retreat as buyers start taking profits. If this happens, the initial support level to watch will be at $0.5816, which is ~25% below the current level.