Can Ethereum-based protocol, Aragon sustain over 70% gains in the long run

While the larger market seemed to embark on the recovery path with Bitcoin above the $48.5K mark, some altcoins and their double-digit gains over the past week still kept traders on their toes. One such altcoin that saw a massive surge in price and social attention was Aragon’s ANT token. 

Aragon, an Ethereum network-based protocol that supports DAOs, developing governance structures to encourage community engagement saw over 75% rise in volumes and over 15% rise in market cap over the last 24-hours. As ANT’s price spiked by over 88% in a week the market seemed to eye ANT for further gains but before that, it was crucial to see what triggered the rally and whether the gains would sustain. 

What led to the surge?

The ANT token was up roughly 75% in the past four days after its price picked up on December 12. The surge in price also led to high trade volumes for the asset on the spot market as the coin saw highly active trading for four consecutive days. Trade volumes saw a 6x surge in comparison to the early December volumes. 

Source: TradingView

The price gains came alongside the DAO global hackathon which aims to attract developers to the Aragon ecosystem. In fact, there were rumors that the DAOpunks NFT project could conduct an airdrop to ANT holders further aiding the coin’s rally. 

What next?

While on the price front things seemed to be glimmering, a look at Aragon’s on-chain activity presented a perplexing scenario. Active addresses for ANT saw no major uptick even though they did rise from the low levels seen on December 11, they were over 70% down from the ATH seen in late November. Active deposits saw a rise too and development activity presented a healthy rise. 

Source: Sanbase

Further, the constant number of total addresses with balance was indicative of a lack of participation on the network. In fact, the 7-day change in new addresses as per data from Into The Block was -60.00%, and active addresses saw an 18.75% decline over the same period. 

Source: IntoTheBlock

Institutional interest in the asset too didn’t look very pleasing and the network’s low large transaction numbers and large transaction volumes were indicative of big players missing from the scene. 

Additionally, whales and HODLers dominated ANT’s ownership statistics, and a lack of investors and retail crowd could be behind the alt’s volatile price action of late. 

That being said, the price structure has been rather volatile and the coin has seen some major ups and downs in the last month. Further, despite the recent over 70% gains, the alt was still almost 50% down from its all-time high price. All in all, ANT remained a high-risk, largely speculative asset with an ecosystem still budding. 

While increasing adoption for the Aragon application could help drive its token price significantly higher in the long term, in the short term it would be better to do your own research before making a move.