As of September 18, 2024, the spot price of the native token NPT of the Newton Protocol was $1.37, down 12.3% from the previous month (real-time data from CoinGecko). The key resistance level is in the $1.53 range, with a sell wall of approximately $23 million (CoinGlass depth chart monitoring), while the support level at $1.21 is being tested – the total buy orders at this level over the past 72 hours were only $8.7 million. The derivatives market has sent out bearish signals: the perpetual contract funding rate on the Bitget exchange has dropped to -0.025% (8-hour average), and the open interest volume has decreased by 19% in a single week, reflecting that market liquidity is shrinking. It is notable that the correlation coefficient between newton protocol price and Bitcoin reaches 0.78. When the volatility of Bitcoin exceeds 40% (such as during the Silicon Valley Bank crisis in March 2024), the amplitude of NPT usually amplifies to more than 65%.
The technical fundamentals show contradictory signals. Although the total value locked (TVL) reached a record high of $347 million (DeFiLlama’s September report), the number of active addresses on the chain has been declining for three consecutive weeks, with the average daily number of addresses dropping from 68,000 to 52,000, a decline rate of 23.5%. The usage data of cross-chain Bridges is even more sluggish: The average daily transaction volume processed is 180,000, which is only 31% of the data of Polygon zkEVM during the same period, and the average transaction fee is $0.19, which is 7 times higher than that of competing products. The lag in development progress has exacerbated concerns. The frequency of GitHub code submissions has dropped from 105 times per week to 69 times, and the mainnet upgrade plan has been delayed by more than 150 days.
The token economic mechanism conceals the risk of selling pressure. Of the current 580 million tokens in circulation, 9% (52 million) of the total will be unlocked in November. Calculated at the current price, it is worth 71.2 million US dollars, equivalent to the total spot trading volume over the past 20 days. The staking model has design flaws: the nominal annualized rate of return is 14.8%, but the actual arrival rate is only 9.2%-11.7% due to network congestion, which leads to the unstaking volume reaching 14 million within 30 days (as alerted by the on-chain analysis platform Arkham). This situation is similar to the Polygon unlocking event in January 2023, which led to a single-day price plunge of 28%.
The regulatory storm impacts the valuation logic. The lawsuit ruling of the US SEC against Coinbase shows that tokens using the delegated staking mechanism have a 72% probability of being recognized as securities (Bloomberg Law Analysis), and the top three verification nodes of the Newton protocol control 51% of the staking rights, far exceeding the 30% decentralized security threshold. The latest report from on-chain compliance firm CipherTrace indicates that the protocol involved suspicious transaction volumes of 12 million US dollars in the second quarter, accounting for 3.46% of TVL, prompting exchanges such as Binance to delisting three similar assets in August. The current proportion of institutional holdings has dropped to 6.7% (data hosted by Bybit), and the spread of market makers’ quotations has widened to 0.7%. These signals of deteriorating liquidity have put pressure on the short-term newton protocol price.
Based on a comprehensive assessment of the market situation, maintaining the price requires three major conditions: the volatility of Bitcoin remains stable below 35% (currently 42%), the monthly code submission volume returns to over 100 times (currently 69 times per week), and there is an average daily net buying volume of over two million US dollars before the unlocking event (currently the net inflow is only 860,000 US dollars). Technical indicators show that $1.28 is the dividing line between bulls and bears. If the weekly closing price drops below this level for three consecutive days, it may trigger algorithmic trading programs to sell off, causing the price to slide towards the support zone of $1.05 (the low point in June 2023). Long-term investors should monitor whether the growth rate of TVL can maintain a healthy benchmark of above 15% (the current quarterly growth rate is 11.3%).