Altcoin
Bancor: Why despite recent drawdowns, BNT might be ready for a rally
Bancor’s native cryptocurrency BNT has been experiencing sideways price action as it entered a consolidation zone. This can potentially point at the building up of a momentum for a breakout or a breakdown, but the when aspect of it is anybody’s guess.
BNT traded at $2.16 after extending its downside by 5.57% in the last 24 hours at the time of this press. Its price action hovered within the same price zone for the last five days and such a consolidation often tends to result in a breakout.
However, it current trajectory suggests that a breakdown might be likely, but what if that is a temporary selloff before a rally? It is thus important to evaluate where the consolidation is happening to understand the likely breakout direction.
Source: TradingView
BNT’s latest price action pushed below below its 50-day moving average. It briefly crossed above it towards the end of March while the lower price level also pushed further below its RSI neutral zone. Its MFI indicator currently suggests that the price has already entered the accumulation zone.
BNT’s on-chain metrics
BNT’s price drop and sideways activity reflects the increase in exchange outflow volumes which slightly outweigh the exchange inflows. However, both registered a significant increase in the last few days.
Meanwhile, Santiment’s onchain volume dropped from around 38 million BNT between 15 and 16 April to around 16 million at the time of writing.
Its MVRV ratio dropped to its lowest weekly level at -10.76% on 14 April and has improved slightly to -9.34%. The ratio reveals that many BNT holders are currently out of the money and might have to hold on until they break even. This may translate to lower selling pressure at current levels.
Source: Santiment
In summary, BNT is currently in a healthy accumulation zone according to its on-chain metrics which align with the MFI. The decentralized platform just announced the Bancor 3 governance approval and a community call for its beta in preparation for its scheduled mainnet launch. These developments may support a sentiment change in favor of the bulls.
