The cross-chain data oracle platform Band Protocol made headlines after the impressive price action its native token has enjoyed over the past few weeks. BAND has seen its price skyrocket over 320% since the beginning of August, fueled by the so-called “Coinbase Effect.”
BAND Shots Up Over 320% in August. (Source: TradingView)
While investors seem to be growing overwhelmingly optimistic about further gains, different metrics suggest that prices are bound for a steep correction.
Mounting Selling Pressure Behind BAND
Band Protocol’s meteoric price action over the past few weeks has not gone unnoticed. Indeed, the number of BAND-related mentions across multiple social media networks surged as market participants appear to have entered a state of FOMO.
The rising chatter around the decentralized oracles token allowed it to move to the number two spot on Santiment’s Emerging Trends list. Such a rise in notoriety has been a bearish sign, historically.
Dino Ibisbegovic, head of content and SEO at Santiment, maintains that when the crowd pays increased attention to a given cryptocurrency because of an ongoing pump, it is usually followed by a steep correction.
“Within the next 12 days after a coin claims a top 3 position on our list of Emerging Trends, its price drops by an average of 8.2 percent. Based on our study, once the increased crowd attention subsides (which usually happens in a matter of hours/days), a short-term price correction – or consolidation – is often a likely outcome,” said Ibisbegovic.
The Chatter Around BAND Explodes as Prices Skyrocket. (Source: Santiment)
Moreover, data from Glassnode reveals that over 1.6 million BAND were transferred to different cryptocurrency exchanges on August 11 as euphoria took over. The significant spike in exchange deposits is a sign of mounting selling pressure behind this altcoin, which may lead to a pullback.
Over 1.6 Million BAND Are Transferred to Exchanges. (Source: Glassnode)
Stiff Support Ahead
In the event of a correction, IntoTheBlock’s “Global In/Out of the Money” (GIOM) model reveals there is a critical supply wall underneath Band Protocol that could hold. Based on this on-chain metric, roughly 730 addresses had previously purchased nearly 210,000 million BAND around $11.80.
Such a considerable area of interest might prevent prices from declining further since holders within this price range will likely try to remain profitable in their long positions.
BAND Sits on Top of Massive Support. (Source: IntoTheBlock)
On the flip side, the GIOM cohorts show that the most crucial resistance hurdle ahead of the decentralized oracles token sits around $14.3. Here, approximately 540 addresses bought more than 253,000 BAND.
Moving past this supply barrier will likely have the potential to invalidate the bearish outlook and translate into new all-time highs.
Featured Image by Depositphotos Price tags: bandusd, bandusdt, bandbtc Chart from TradingView.com
