The bullish outlook for PYTH in 2025–2026: Causes and expectations

This week, the crypto market has recorded many notable fluctuations, among which the most prominent is the Pyth Network (PYTH).

At the beginning of the week, the US government unexpectedly announced a plan to move economic data onto the blockchain and chose Pyth as the infrastructure for implementation. This information immediately created a positive effect, pushing PYTH to become the focal point in the crypto market.

The peak was the trading session on Thursday, when PYTH recorded a spectacular breakout with a daily price increase of over 100% – a record high.

Price movement of PYTH | Source: TradingViewThis is particularly impressive when looking back at the previous period, when PYTH struggled to find buying power to escape the record low price range. Clearly, the decision of the US government has become the strongest catalyst, helping this coin escape the deadlock and opening a new chapter.

PYTH trading volume reaches historic peak – but is it sustainable?

The recent price surge demonstrates a strong attraction from the new announcement, but what is even more impressive is the explosion in liquidity.

According to data from DeFiLlama, the trading volume of PYTH has skyrocketed, from 23.36 million USD on Wednesday to 1.42 billion USD in just one day – equivalent to an increase of over 6,000% in 24 hours.

The derivatives market is even hotter, with trading volumes exceeding 3 billion USD. Open contracts have also surged rapidly, from 40 million USD to 194 million USD, indicating a strong influx of capital.

However, the rapid increase has pushed PYTH into overbought territory, triggering a wave of expectation for a correction. The clearest sign is that the funding rate has turned negative at a high level.

Over the weekend, the market recorded a capital outflow from spot trading of more than 12 million USD, reflecting short-term profit-taking activities. Although this figure is higher than the capital inflow on Thursday, the price of PYTH still maintained most of the growth achievements.

The inflow/outflow of PYTH on the spot exchange | Source: CoinglassNotably, this capital withdrawal level is lower than previous rounds, indicating that many investors remain patient, maintaining their bullish expectations. Thanks to the buying pressure returning, PYTH has recovered from a daily low of 0.19 USD to 0.25 USD.

This strong volatility has also wiped out 11 million USD in short positions, while the number of long positions liquidated stopped at 7 million USD.

Does PYTH maintain its recent upward momentum?

The U.S. Department of Commerce's selection of Pyth Network is not only an important step in applying blockchain technology to government management but also brings this network into the global spotlight.

The above move could become a precursor for more widespread applications in the future, opening up positive expectations for the PYTH coin in the short term – although the long-term outlook remains uncertain.

Currently, the increasing demand continues to play a supportive role for prices. However, the biggest challenge lies in the supply: in the next two years, the amount of tokens issued is expected to increase significantly. Evidence of this is the most recent unlocking in May, which raised the circulating supply from 3.62 billion to 5.74 billion tokens.

Unlock PYTH | Source: DeFiLlamaAccording to the schedule, Pyth unlocks every May. This means there are only about 9 months left before the supply increases dramatically to 7.87 billion tokens. This is both a time for the bulls to take advantage of price boosts, and a phase that poses potential risks of value dilution.

However, the negative impact from the increase in supply could be offset if the market capitalization of PYTH continues to maintain an impressive growth rate.

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