ASTER token sinks to record low, buybacks follow

ASTER sank to a new all-time low in the past 24 hours, reaching $0.62. The perpetual futures DEX token is now over 28% down since its launch and around 75% below its all-time high. 

ASTER tokens trading at a new all-time low triggered the team to launch a Strategic Buyback mechanism. The buyback is part of Aster’s tokenomics in case of deeper token drawdowns. 

Aster will deploy its Strategic Buyback Reserve to start automatic ASTER repurchases. The trades are part of the Stage 5 buyback program, which takes into account different pricing scenarios. 

The current Strategic Buyback allocation will return 20% to 40% of daily platform fees into targeted buybacks, responsive to price action. 

Aster announced that some of the repurchases have been completed through its reserve wallet. The Treasury is already swapping BNB for Aster and increasing its balance. 

ASTER moves into ‘sell’ zone

ASTER has moved into the ‘sell’ zone based on its current sentiment. The token has not recovered from the all-time lows even hours after the buyback news. As a token linked to a perpetual DEX, ASTER expected an effect similar to HYPE. However, even with buybacks, ASTER saw significant selling pressure, leading to unraveling over the past three months. 

ASTER is not the only perpetual DEX token to slide. HYPE is also under $24, with sell indicators flashing. As the market slowed down again, the previously hot tokens are responding with a deeper downturn. 

Open interest also crashed for ASTER, down to $215M near an all-time low. Only around 25% of positions are short, meaning ASTER may not hope for a short squeeze. The recent downturn also came with relatively smaller volumes of around $283M in the past 24 hours, within the token’s usual range.

Why is ASTER sliding? 

The current ASTER buybacks are not destroying the supply. The tokens are merely held in the treasury, with a decision to be taken in the future about the final supply. The Aster community is also calling to burn the tokens and potentially salvage the asset through scarcity. 

One of the major factors for the ASTER price weakness is the upcoming unlock in February. A total of 96M tokens will flow into the market in February, as Aster enters a stage of regular unlocks. The upcoming unlock is expected to trigger even bigger selling, which may not be entirely offset by the buybacks. 

More ASTER will enter the market each quarter until 2035, potentially freeing up whale wallets to sell. ASTER has traditionally dropped even lower during airdrop periods, which trigger large-scale selling of the available supply.

The Aster DEX is also still trying to outcompete Hyperliquid and Lighter, which retain high trading volumes. The high leverage on Aster makes the exchange riskier. Despite the expectations of a slide, traders are even reluctant to open short positions, as the volatile token can also rally unexpectedly and cause liquidations.

ASTER may attract some traders into buying the dip. However, the token remains risky and volatile, recently dipping as low as $0.53 during extreme trading. In the short term, ASTER is reacting with significant dips as whales realize profits. 

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