Here is how one algorithmic indicator anticipated multiple phases of FXS’ protracted rally

cointelegraph.com:

Frax Share (FXS) has been one of the few altcoins to pull off a dominant price performance amid the down market of late 2021 to early 2022. In the month between Dec. 14 and Jan. 14, FXS was up 128% against the U.S. dollar and 159% against Bitcoin (BTC). In addition to this impressive feat, FXS topped the charts of historically bullish trading conditions on multiple occasions throughout this period. What is behind the token’s recurring strong trading outlook?

FXS is the utility token underpinning the Frax ecosystem — a stablecoin protocol that seeks to occupy a middle ground between entirely collateralized and entirely algorithmic stablecoins, thus harnessing the advantages of both designs.

In accordance with the protocol’s highly “governance-minimized” approach to its architecture, there is a limited set of parameters that the community gets to adjust using the token. These include refreshing the rate-of-collateral ratio — i.e., the share of the protocol’s FRAX stablecoin that is stabilized either algorithmically or through collateralization — in addition to adding collateral pools and adjusting various fees.

FXS’ supply is initially capped at 100 million tokens, and the protocol is designed for the token supply to be deflationary as the demand for the FRAX stablecoin rises. This mechanism could be responsible for at least some portion of FXS’ momentum in recent weeks. As Cointelegraph previously reported, FRAX added 300% to its circulating supply between late October and late December.

Because of this link between the demand for FRAX and the corresponding shrinkage in the supply of FXS, rounds of FRAX adoption can theoretically result in waves of FXS appreciation. Evidence supporting this hypothesis can be found in several