ASTER, the token for the perpetual futures decentralized exchange (DEX), has fallen to a new all-time low of $0.62 in the past 24 hours. This represents a decline of over 28% since its launch and approximately 75% from its all-time high.
The significant price drop has prompted the Aster team to activate its Strategic Buyback mechanism, a feature designed to address substantial token drawdowns as part of the project's tokenomics.
Aster will utilize its Strategic Buyback Reserve to commence automatic ASTER repurchases. These actions are categorized under the Stage 5 buyback program, which incorporates various pricing scenarios.
The current Strategic Buyback allocation will direct between 20% and 40% of daily platform fees into targeted buybacks. This mechanism is designed to be responsive to price action.
Aster has announced that some of these repurchases have already been executed from its reserve wallet. The Treasury has been actively swapping BNB for Aster, consequently increasing its balance.
ASTER Enters 'Sell' Zone
Based on current sentiment, ASTER has entered the 'sell' zone. The token has not shown signs of recovery from its all-time lows, even hours after the buyback news was released. Despite being linked to a perpetual DEX, ASTER has not experienced the expected positive effect. Even with the buyback initiatives, ASTER has faced significant selling pressure, leading to a prolonged downturn over the past three months.
ASTER is not the sole perpetual DEX token experiencing a decline. HYPE is also trading below $24, with sell indicators flashing. As the broader market has slowed, previously high-performing tokens are now facing deeper downturns.
Open interest for ASTER has also significantly decreased, dropping to $215 million, nearing an all-time low. With only about 25% of positions being short, ASTER is unlikely to benefit from a short squeeze. The recent downturn has been accompanied by relatively lower trading volumes, around $283 million in the past 24 hours, which falls within the token's typical range.
Reasons Behind ASTER's Decline
The current buyback activities for ASTER are not actively reducing the token's supply. The repurchased tokens are being held in the treasury, with future decisions pending regarding their ultimate fate in relation to the total supply. Members of the Aster community have also advocated for burning the tokens to potentially increase scarcity and support the asset's value.
A significant factor contributing to ASTER's price weakness is an upcoming token unlock scheduled for February. A total of 96 million tokens are expected to enter the market during this period, marking Aster's transition into a phase of regular unlocks. This substantial influx of tokens is anticipated to trigger increased selling pressure, which may not be entirely counteracted by the ongoing buyback efforts.
Additional ASTER tokens will be released into the market each quarter until 2035. This prolonged release schedule could potentially encourage large holders, or "whales," to sell their holdings. Historically, ASTER has experienced further price declines during airdrop periods, which typically lead to large-scale selling of the available supply.
The Aster DEX is also facing intense competition from platforms like Hyperliquid and Lighter, which maintain high trading volumes. The high leverage offered on Aster contributes to increased exchange risk. Despite expectations of a price slide, traders are hesitant to open short positions, acknowledging the volatile nature of the token, which can also experience sudden rallies leading to liquidations.
ASTER might attract some traders looking to capitalize on the dip. However, the token remains inherently risky and volatile, having recently traded as low as $0.53 during periods of extreme trading. In the short term, ASTER is demonstrating significant price dips as whales realize their profits.